Delta Air Lines said Monday it will buy an oil refinery near Philadelphia in hopes of cutting $300 million a year from its jet fuel bill.
Delta said one of its subsidiaries will buy a refinery in Trainer, Pennsylvania from Phillips 66, a refining company that used to be a part of ConocoPhillips, according to the Associated Press. The airline will pay $150 million for the refinery, including $30 million in job-creation assistance it plans on receiving from the state of Pennsylvania.
A spokesman from Delta said the company believes this will be the first purchase of its kind by a major US airline, reported CNN. The purchase is expected to be finalized by the end of June.
"Acquiring the Trainer refinery is an innovative approach to managing our largest expense," Delta CEO Richard Anderson said in a statement, according to CNN. "This modest investment, the equivalent of the list price of a new widebody aircraft, will allow Delta to reduce its fuel expense by $300 million annually and ensure jet fuel availability in the Northeast."
The AP reported that Delta burned almost 3.9 billion gallons of jet fuel last year, which cost $11.78 billion. Fuel was its biggest single expense, taking up 36 percent of all the airline's operating expenses.