Delta buys a refinery
delta air

Consumers have a ton of complaints about airlines. That they don't refine their own jet fuel is not one of them. Nonetheless, in April, Delta (DAL, Fortune 500) decided to spend $220 million to buy and restart a shuttered oil refinery on the outskirts of Philadelphia. It wasn't Delta's largest deal of the year. The company agreed in December to buy 49% of Virgin Atlantic airlines for $360 million (a deal that received plenty of criticism, too). But the refinery acquisition was Delta's most controversial.

Delta's CEO Richard Anderson said the refinery would greatly reduce the airline's exposure to rising and falling jet fuel prices. Yes, but it will also greatly increase the company's exposure to changes in the price of oil, which is the primary input for a refinery. And while Anderson is worried about that, passengers will be left wondering why their connecting flight in Atlanta never showed up.

Editor's note: A previous version of this slide incorrectly stated that Delta agreed to purchase 49% of Virgin America in December. Delta agreed to purchase a stake in Virgin Atlantic.

  @FortuneMagazine - Last updated December 28 2012 03:45 PM ET
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