In Spring $2012,$ Delta Air Lines purchased an oil refinery from Phillips $66,$ the downstream business spinoff of ConocoPhillips. The purchase, made by Delta$$s sub$-$ sidiary, Monroe Energy LLC$,$ for $$150$ million, was touted as an attempt to save money on rising jet fuel costs. According to Delta$$s CEO Richard Anderson, $$While Delta will remain hostage to fluctuating crude oil costs, the facility would enable it to save on the cost of refining a barrel of jet fuel, which is currently more than $$2$ billion a year for Delta and has been rising in the wake of U$.$S$.$ refinery shutdowns.$29$

Delta also announced that after the purchase it would spend an additional $$100$ million to convert the existing refinery to optimize the production of jet fuel. The refinery, located in Pennsylvania along the Delaware River, produces more than $185,000$ barrels a day. The acquisition also includes pipelines and transportation assets that reach Delta$$s operations throughout the Northeast. To allay concerns that Delta had no experience in running a refinery, Delta planned on hiring executives from the refinery business to manage its new facility.

Evaluate Delta$$s decision to backward integrate into jet fuel refining in light of the discussion of make$-$or$-$buy fallacies in this chapter.