Delta Airlines and the Trainer Refinery
Case number:
A07-13-0005
Abstract
In April 2012, Delta Airlines was evaluating the potential purchase of the Trainer Refinery in Philadelphia. Delta had been seriously negotiating and pursuing the purchase of Trainer, owned by Phillips 66, for nearly a year. Although Delta's management team believed that owning Trainer would allow Delta to manage its rising fuel costs, particularly in the Northeast Corridor of the United States, the analysts, markets, and press had categorically criticized the potential purchase. Delta needed to decide quickly.
Teaching
The case can be used in both graduate business courses and executive programs. It can be used in a variety of different subject settings: (1) general corporate strategy focused on the appropriateness of vertical integration and acquisition; (2) managing a rising input cost in terms of corporate competitivness; (3) financial management of rising input costs, and the comparison of operational versus financial derivative input cost hedging strategies; (4) energy industry analysis focusing on how rising fuels costs challenge corporate competitiveness; and a variety of others.
Case number:
A07-13-0005
Year:
Setting:
North America
Length:
13 pages
Source:
Library