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Business Class Passenger Exposes Pandemic ‘Safety Feature’ Cattle Class Is Missing Out On

Flying in 2020 is a persona non grata experience. From the airport to the plane (to the quarantine hotel), if you don’t feel like a leper by the time you arrive, security hasn’t done its job.

However, there is one ~extra~ safety measure in place that is apparently only evident in business class on some flights, an Australian passenger who flew to Europe with Qatar Airways at the start of July told DMARGE.

That measure? Cabin crew wearing hazmat suits.

Earlier this month DMARGE spoke exclusively with Jaynee Wehbe, global sales director at TRIANGL, who recently was granted an exemption to travel to Ibiza on business, to find out what it’s like to fly flat to Europe right now.

Jaynee told us seeing the PPE suits felt bizarre: “It made me feel more confused than anything! I mean why is it necessary to cover your entire body? And if they think it’s necessary then why aren’t we doing it too?”.

“It was really hard to communicate with them too as the plane is loud enough and then you couldn’t see their mouth move or even their eyes!”

“The hazmat suit was only in business class: the other attendants wore a robe, mask and goggles only (only!),” Jaynee added. “Which is also confusing.”

View this post on Instagram

A post shared by Qatar Airways (@qatarairways) on Jul 21, 2020 at 9:15am PDT

Another twist in the tale, according to Jaynee, is that the airport, when Jaynee flew, appeared less equipped to kill germs than the aircraft departing it: “Sydney international airport itself surprised me,” Jaynee told DMARGE.

“From memory I didn’t see any hand sanitizer stations, check in staff weren’t wearing gloves/masks nor was there any sanitizer even though they were dealing with our passports and documents.”

“Our temperature wasn’t taken upon arrival to the airport or even before boarding the flight which I found weird as we’re getting our temperature taken at restaurants now!”

Finally, Jaynee told us the face shield concept could do with some work: “Another thing I found weird was that they were handing out face shields for the flight and you weren’t allowed to walk onto the plane without wearing one.”

“But as soon as you walked past the flight attendant when you’re on the plane, you could take it off and have it off for the whole trip.”

“I just found the whole process inconsistent. Measures in place just to say that measures are in place.”

Qatar Airways is one of several airlines to introduce PPE suits for its cabin crew. Qatar Airways introduced the feature on the 18th of May to help the airline continue repatriating citizens around the world.

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A post shared by Qatar Airways (@qatarairways) on Jun 7, 2020 at 9:36am PDT

According to an official statement, Qatar Airways’ cabin crew had already been wearing lower level PPE, such as masks and gloves, during flights for a number of weeks before this “extra precaution” was instigated.

“At Qatar Airways, we have introduced these additional safety measures onboard our flights to ensure the continued health and well-being of our passengers and cabin crew, and to limit the spread of coronavirus,” said Qatar Airways Group Chief Executive Akbar Al Baker.

DMARGE understands Qatar Airways has not officially announced whether the hazmat suits were intended to be across the board, or only for The Pointy End.

This also comes in a context where Qatar Airways are facing allegations of bumping economy ticket holders off flights and prioritising Pointy End passengers, after Sydney Airport reduced the number of arrivals any given aircraft can bring.

July 2020 Picks

All figures in Australian dollars (1 AUD = 0.71 USD at time of publishing).

Amazon (NASDAQ: AMZN) US$2,961.97

E-commerce remains the #1 pass-time of the locked-down and socially distanced. We can’t spend money on travel, restaurants or experiences (which has been a key investment theme of the past few years, experiences over ‘stuff’) – we are now back on the consumerism bandwagon!

Amazon is primed to capture the vast majority of this shift. It’s growing dramatically outside the US, at very high margins (AWS, media, ad business) and is a now a multi-sector monopoly. If it gets hit with an anti-trust driven breakup, it will only unlock additional value for shareholders in my opinion.

In short: Probably going to get bigger, better and more dominant.

Super Retail Group (ASX: SUL) $8.19

SUL owns Super Cheap Auto, BCF, Rebel & Macpac. See above RE: the new consumerism bandwagon. We also can’t travel overseas, so once borders open you’re going to see people doing up their cars, buying caravans and campers and going hiking and camping and 4WD’ing all over Australia.

In the US, LCI Industries recently reported earnings 40% ahead of analyst estimates citing:
“Increased demand for RVs drove accelerated outdoor recreational products sales, which was well ahead of increasingly bullish expectations as we moved through the early part of Q2. In this post-COVID environment, RVs continue to be one of the safest ways for American families to take a vacation. Underscoring this strength, a recent RVIA survey reported that 46M people intend on taking a trip in an RV in the next 12 months.”

SUL is not too expensive 5.6x EV/EBITDA on consensus estimates (vs 5 year average of 7.7x) either.

In short: A rare business in retail with structural tailwinds at a reasonable valuation.

TNT Mines (ASX: TIN) $0.14

I always like to throw in something saucy for the punters. TNT recently acquired a strategically located land package in Utah that is highly prospective for uranium and vanadium (used to batteries). I like management, I like the tight company structure (not too many shares on issue, low market cap, cash in the bank and management alignment) and I like how under the radar this company is… for now. With less-attractive peers valued at multiples of the current value of TIN, results pending and not many shares around, it won’t take much for this to pop in my opinion.

In short: Very high risk, very speculative, very naughty.

This article is of a general nature only and does not consider your objectives, financial situation or needs. You should consider the appropriateness of the information in light of your objectives, financial situation and needs before acting on it and obtain copies of any relevant disclosure documents. Seneca Financial Solutions does not warrant the accuracy or reliability of the information in this report. Luke Laretive, Seneca Financial Solutions, it’s Directors and it’s associated entities may have or had interests in companies mentioned. They may have or have had a relationship with or may provide or has provided investment banking, capital markets and/or other financial services to those companies mentioned.

Luke provides clients with a daily note, which you can access here.

The upshot? Even though it will take a while for the ~real~ economy to get back to the size it was in 2019, the market has already gone bullish once again. Though some call this unjustified fizz, the government backing of MAGA stocks (and the investor confidence we’ve seen so far) has led others to say the market may survive this thing better than first thought.

Speaking of uncertainty, Tesla just became the most valuable car company in the world.

As Forbes reported on Monday, “Tesla stock is [now] worth more than triple the combined value of US automakers General Motors (GM GM +0.6%) and Ford (F).”

“It’s insane given that these two automakers generated 10 times more sales than Tesla last year.”

Alongside this, Tesla co-founder Elon Musk was on Tuesday catapulted, briefly, to ‘fifth richest man in the world’ status.

So, is this all hype, or is there real worth behind Tesla’s meteoric rise?

DMARGE asked James Whelan, Investment Manager at VFS Group in Sydney, for his take.

“We look at valuations.”

“Tesla [is] running at something like 230 times the price to earnings ratio; the price of Tesla is 230 times what it earns on a per-share basis.”

“That’s insane.”

“The market as a whole was trading at 23/24 times [the price to earnings ratio] last week, before the pandemic hit it was trading at 17; the average amount the market as a whole trades at is usually around 14 or 15.”

In other words, though there is some value beneath, Tesla’s stock is a bubble.

Whelan also told DMARGE, though Tesla makes “beautiful cars” it will face stiff competition from the likes of VW, the biggest European carmaker in the world, and other companies, which just need to “flick a few switches” before being able to able to produce electric vehicles “much more efficiently, much cheaper and in greater numbers than Tesla.”

The above factors, combined with the “fanboi” culture around Tesla and Elon Musk’s eccentric personality, deter Whelan from investing in Tesla.

“It’s trading at such a ludicrous ratio… why would you do it?”

A safer option, for those who have already made money from Tesla, is to now invest in more stable stocks. “Smart money,” Whelan tells us, “would… buy copper or lithium. That way you don’t have to choose between Tesla, VW, Porsche or Toyota.”

“They’re all going to go to electronic vehicles, so I’d just buy lithium; it’s used in the batteries, or copper which is used in [practically] every part of the electronic vehicle. Then I don’t really care who wins this fight, I know that if they both win, I’ll win.”

“Even if they both lose I’ll still probably win.”

“I don’t want to have to worry about Elon Musk’s dodgy 4 am tweets, I’d rather just own a commodity that’s going to benefit from an electronic revolution, isn’t that easier?”

Dude…I just lost $10k because of this tweet. Wtf is wrong with u

— Elvis (@TradeLikeElvis) May 1, 2020

Another factor at play, hiking up the bubble, Forbes suggests, is short squeezing. This happens when investors short Tesla, only for their bet not to pay off (and for them to be forced to buy Tesla shares and return them to their broker).

As Forbes reports, “The higher stock price wipes out even more short sellers, which in turn drives the stock price even higher. This repeats again and again, sending the stock price to bananas levels. And this vicious cycle is what we call a ‘short squeeze.'”

“The dollar value of all shorted Tesla shares is close to hitting $20 billion. No US stock in history has ever been that shorted.”

“For perspective, Apple AAPL +0.3%, the second-most shorted stock in America, has 13 billion dollars’ worth of its shares shorted. But… the company is 14 times bigger than Tesla.”

“The sheer magnitude of short sellers put Tesla at risk of being caught in a short squeeze of historic proportions,” (Forbes).

There is some value beneath the bubble though. As Mathew Cassidy, Managing Director at Partners Wealth Group, told DMARGE, some of Tesla’s stock price’s recent rise can be attributed to Tesla’s evolution as a company: “Tesla started as trying to establish a brand,” Cassidy told DMARGE.

“Now they’re actually starting to become a lot more commercial – as soon as a business goes from development to commercialisation the revenue starts to flow and that’s when they really start to perform.”

He also said another factor to consider when weighing up whether to invest in a company, or a first mover, is how open they are to innovation: “Netflix approached Blockbuster about 10 years ago and blockbuster denied [them].”

Amazing, Volks Wagon head of Marketing, credits Elon and says “without Tesla we would be so BOLD.”. VW has committed $30B euro to put >1 million electric cars /year by 2025. We are heading towards a “Kodak Moment” with the demise of Internal Combustion car.

— Peter H. Diamandis (@PeterDiamandis) November 29, 2017

Kodac, Blockbuster, Motorola and Nokia were all great businesses that failed to reinvent themselves. The question for modern investors, then, is whether Tesla will remain at the leading edge or whether other companies will come in and do what they’ve been doing in a smarter way.

As Whelan told DMARGE, there’s plenty of motivation for companies to catch up to Telsa: “VW, their entire motivation is going to now be about EV because of what’s going on in China. They’re late to the party, but you’ve got amazingly productive and amazingly efficient workshops all around the world for all these car makers.”

“That’s the competition Tesla has in front of them, and quite frankly I just don’t like to be a part of very bubbly stocks because when the rug gets pulled out it gets pulled out really hard.”

On that note, Cassidy said, “You’ve got to understand where your risk is coming from,” noting that generally, after historical moments of crisis (for instance the GFC, and September 11) when stocks start getting expensive and “when you start getting tips from the taxi driver… because a lot of momentum is going on, it’s probably a good time to start selling them.”

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