Flying J

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Flying J cited a cash shortage in a Chapter 11 filing Monday, brought on by the steep decline in oil prices and tight credit markets. Flying J, which has 250 service and travel stations nationwide, is one of America's largest privately held companies. The company plans no change in operations during the reorganization.

Op: One would think that declining oil prices would not have a material effect on a service station--indeed, the lay person figures it could help, not hurt, margins, since the stations could lower prices more slowly than the futures market. But if Flying J secured its oil at too high a price, and competitors with better buying can lower prices faster, this wipes out profitability.

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That's too bad. Flying Js were an oasis of diesel, propane, and sewer disposal on our cross country RV trip to Burning Man last year. They were consistently cleaner and friendlier than some of the other options.

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Timely Demise tracks the retail industry as it changes with our unprecedented economic environment. Published by David Wertheimer. Did I miss something? Drop me a line.

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This page contains a single entry by David Wertheimer published on December 23, 2008 10:41 AM.

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