Veeresh Malik
Flying the toxic skies-III

Passengers are supposed to get clean and fresh air during a fight. So why is the air we breathe on board airplanes so bad?

In part III, we try to bring forth the legal and regulatory aspects in India, such as they are.
Cabin air quality is another word that comes up again and again in context with toxic air on board modern passenger airplanes. Research on the subject has been reported from as far back as the '80s and '90s, and from interested parties in parts of the world as diverse as Hong Kong, USA, Canada, UK, some European countries, and Australia. The results of these studies and investigations sound suspiciously like similar research done in those days and previously on subjects like tobacco and automobile emission—with brilliant usage of phrases like "not sufficient proof" or "can not be confirmed". However, nowhere is it denied that an increasing number of people, both passengers and crew, are often suffering from something during and after flights. And increasingly, data being acquired is beginning to support the point of view of those who wish to be heard on the subject.
It is just that the whole effort seems to get lost in semantics and grammar, as well as long words, while the aviation industry moves on towards a permanent race towards increasing efficiencies of scale as well as turning profits. In itself, not an altogether incorrect approach, but at what cost?
Within the Indian regulatory context, there is apparently close to no research or studies on the subject available to the public and the standard response from Directorate General of Civil Aviation (DGCA) as well as the Ministry of Civil Aviation (MoCA) is that they go as per manufacturer's specifications. Take a closer look at the DGCA specified "Cabin Inspection Report", and it does not have even a single reference or column to air-quality on board prior, during or after a flight. Incidentally, this is basic information that the engineering and other departments in better hotels take the effort to source out, record, and if required, fix. This is also not rocket science, since all it requires is training that an aircraft engineer or cabin/cockpit crew already has and instruments that would cost at best a few thousands of rupees. Expect to see such instruments, incidentally, inside the cabins of luxury cars very soon.
Simple fact remains: "Internal Air Quality" is a subject of great importance now and very simple as well as portable instruments are available easily all over the world, including in India, to measure walk-through as well as long-term parameters on toxic gases, particulates, moisture, ventilation (so important when the aircraft is on the ground for long periods), and most of all, volatile compounds in the environment on board which, inside an airplane, means the assortment of gaseous chemicals that will find their way through the filters—from the fuel, lubricants, seals and other chemicals in use. Remember, we are talking of bleed air coming out of the engines at temperatures higher than 400 degrees centigrade, once the engines are operating at thrusts varying from take-off to cruise. And at pressures varying from fractions of ground level outside, to multiples inside the engines, which in turn if you recall your school level PVT formulae, do some amazing things to most matter, leave alone volatile chemicals.
But then, of course, it suits our babus to continue to trot out the manufacturer's line. And not just with civil aviation. Just like they've done for the tobacco issues—till today, bidi packets are not marked as dangerous, paan masala with tobacco continues along its merry way at a cancer hospital near you, and as for the "smoking kills" campaign—the less said the better. Even the much maligned Indian Railways have commenced studies to investigate air quality in their newer air-conditioned rakes, especially for the 3-Tier air-conditioned wagons, where you have a large number of people inside an almost hermetically sealed environment, and where, if in doubt, you can always open the door. But civil aviation? It is probably more important to work on privatisation of airport contracts.
As a seafarer, your correspondent knows the subject—from the proverbial mynah bird let down into cargo holds and tanks to chirp out about good or bad air quality to modern day instruments, which define the same thing in a more precise manner. Your writer has seen them all—in sizes from as small as a pocket sized ball-pen to the largest pre-fitted in suitcases, which are smaller than the size of carry-on cabin baggage. Accommodation blocks on ships at sea seldom need to have cabin air quality measured, since fresh sea air at normal barometric pressures is available in vast quantities, but even there these are often tested.

However, it is for the cargo spaces, deep tanks, double bottoms and other spaces and those going inside them that these instruments become life savers. And they are so easily as well as freely available that one wonders why the aviation regulators in India do not simply reach out and borrow a few-unless they already know the results and are not keen to do so officially? {break}
So, to round off—in the rest of the free and democratic world, court judgements as well as research on cabin air quality within passenger aircraft are beginning to show up. Bear in mind that the sheer effort of taking on the aviation industry in anything—remember the last time you tried to fight for a simple refund due to you and finally gave up, means that the smallest victory has a much larger story and effort behind it.
Do take a look here, then: see here
And also:
The global resource point on this subject is here, at the website of the "Global Cabin Air Quality Executive" (GCAQE):
In very brief, an airline that operated a particular brand and model of a passenger aircraft, which often released smoke and fumes, was successfully sued by a cabin crew member who suffered from respiratory problems due to this and in doing so opened the door to multiple litigations on the same subject worldwide. Since aviation is a worldwide industry, it is anticipated that this judgement will open the floodgates. It is pertinent to point out here that one of the earliest studies on the subject was conducted by the Royal Australian Air Force, results of which were on the Internet but seem to have now gone adrift—they were startling, to say the least.
In the absence of any regulations in India to date for aircraft cabin air quality, it appears as though it will be very difficult for anybody to seek legal or other assistance in this matter in this country, but it will not end there. Indian registered aircraft operating to countries where standards and legalities are being set at this time will need to comply if they wish to fly to those destinations. Within India, domestic airlines will need to adhere to stringent international parameters even if the regulators do not insist, if they wish to keep their insurance levels up towards servicing international passengers. And eventually, hopefully, it shall be articles like this in a free media that will jerk the authorities out of their toxic air induced sleep on board airplanes into doing something on the ground with the regulations that are fast needed.
After all, if we can have these instruments and precautions on board ships and hotel rooms, then why not in airplanes?

(This is the concluding part of the three-part series)


‘This year will be a reality check’

Rajiv Deep Bajaj, VC & MD, Bajaj Capital, spoke to Moneylife’s Sanket Dhanorkar on the plans that his company has to increase its client base

Sanket Dhanorkar (ML): How is the distribution business working out for Bajaj Capital? What are your growth expectations in terms of revenues?
Rajiv Deep Bajaj (RB):
Bajaj Capital has always had its core strength in distribution. Our mission is to create one crore crorepatis across the length and breadth of India and thus our branch network will be spread accordingly. We are already catering to around eight lakh investors in the country and intend to increase our client base year-on-year, both through combination of new clients and retention of existing ones. We also have plans to spread our services to Tier-2 and Tier-3 cities and districts and would be following four broad approaches for distribution which would be branch networking through investment and insurance centres; resident representation, stock-broking dealing offices and exclusive wealth cafes for discerning high net-worth individual (HNI) Investors to discuss Investments over a cup of coffee. We will maintain revenue growth at not less than 30-35% on an annual basis.

ML: What is your sense regarding current trends in the equity markets? How do you see the markets going from here?
2010 is likely to be a year of reality check, a year of adjustments and a year of grind. 2009 has been a year of recovery with the markets almost doubling, led by a jump in earnings growth, rise in risk appetite, return of investor confidence and robust liquidity flows. The performance in 2009, both in terms of earnings as well as price growth might not be repeated in 2010 as businesses adjust themselves to higher interest rates and higher input costs. With markets trading in the fair value plus zone, chances of a significant re-rating from these levels are pretty low as businesses sit on some stupendous ‘cost rationalisation’ led bottom-line growth, which might not be repeated in the near future. Rising interest rates have the potential to increase the risk premium for equities, a fact that must not be overlooked at a time when inflation is threatening to go out of control. 

Hence, at best, the markets are likely to remain range-bound in 2010. In such a scenario, taking bets on the direction of markets might turn out to be more risky. Rather, a more stock-specific approach, focusing on fundamentals of a company, has the potential to do better. With the situation expected to improve in 2011, investors should, however, endeavour to position their portfolios so that they are able to reap the benefits of a fresh bull run that might start in 2011.

ML: What is your view about the rampant mis-selling of products, which is a direct outcome of the commission-based structure of the industry?
Mis-selling is unfortunate and is strongly condemned, given that we are in the business of enabling wealth creation for investors. Our first duty as an advisor is to do no harm. Hence, advisors should first seek to preserve the existing wealth of investors before going about enhancing it. The only way to prevent this is to enforce more regulations around "Licence to Advisors" before meeting their clients. Certifications from IRDA, AMFI and Financial Planning Standards Board should be mandated for advisors to start advising investors, and regulators must enforce discipline like say a traffic controller enforces for driving without a licence.
Investor awareness needs to be enhanced especially in Tier 2, 3 towns and they should be encouraged to read and understand the fine print. Investors should also exercise restraint and never invest on tips and hearsay. One should never invest without the assistance of a professional financial planner.

ML: What is your view on the current regulatory tussle between SEBI and IRDA on the issue of Unit-Linked Insurance Plans (ULIPs)? What needs to be done to level the playing field between such investment products?
It is beyond our mandate to comment on who should be regulating ULIPs. As a financial planning company, our mandate is to ensure that our investors’ money is managed well and that they get good customer service. Both SEBI and IRDA are very astute regulators, as they have demonstrated in the past, and hence whoever regulates ULIPs, we have no doubt that the interest of our investors will be protected. {break}

ML: What is your take on the high redemptions in mutual fund schemes despite a booming market (every month from August to March, except for February, saw redemptions outstripping purchases)?
If you follow the fund flow trend within asset categories in mutual funds over the last seven-eight months, you’ll find that long term categories like ELSS and conservative categories like income funds have been getting continuous positive flows. Also, periodic outflows from liquid and money market funds should not be construed as indicator of the net sales in the mutual fund industry. Yes, fund flows were visibly negative in open-ended equity fund categories but primarily due to profit booking, following the almost 80% rally, and for rebalancing for capital protection and asset allocation, a learning for the investors from the fall of 2008.

Fixed income instruments like company FDs, with good yields/interest rates, and capital protection oriented structures from mutual funds also attracted funds. This is really a healthy trend for the industry where real retail money is coming in the form of long-term assets and it is spreading across the asset categories, thus highlighting the ‘asset allocation’ approach being followed, which is the ‘core’ of financial planning.

ML: What is your experience with retail investor participation in your products?
Bajaj Capital is an ‘open architecture’ independent financial planning company. We do not have any products of our own, but we choose from a wide range of products like mutual funds, life insurance, general insurance, company fixed deposits, bonds, pension schemes, etc to create the portfolios of our clients.
We also keep rebalancing them from time to time. Our products suit all classes of investors, including senior citizens, doctors, lawyers, architects, young professionals, defence service officials, etc. Our experience has been that while there have been few people who are self-motivated to plan well for their future financially, many people have to be motivated and educated by advisors through one-on-one interactions. They usually get motivated by case studies of successful investors who have amassed great wealth by disciplined, long-term investments. To serve the purpose, we keep on holding investor conferences in different cities at regular intervals and we have been getting a good response so far.

ML: Any new product/service launches in the pipeline? What are your expansion/diversification plans for the future?
While Bajaj Capital offers a wide range of products ranging from mutual funds to life insurance, general insurance, company fixed deposits, pension schemes, bonds, stock broking, etc, we are planning to package all of this together and start by opening a common account for investors, where they can avail a ‘bundle’ of services. We are continuously working on service innovation to enhance convenience for our investors. Some initiatives in the pipeline include a wide range of products around retirement solutions like the New Pension Scheme (NPS) and enhancement of features of the online investment platform to include a wider spectrum of products.

ML: Can you elaborate on your 360-degree financial planning initiative and online platform, ‘Just Trade’?
We at Bajaj Capital provide financial planning and need-based advice to our clients. The planner’s final recommendations to clients are based on his understanding of their personal situation, scientific and logic-backed processes and research outlook. Product selection is an outcome of this exercise, which we call as ‘360-degree financial planning’. What the client gets as output is a complete life ‘snapshot’ on a single sheet with advice for implementation of the same. More than 1 lakh investors have benefited from this service so far.

Our online platform is now robust—we have doubled our client base since our inception two years back. We continue to believe that in the years to come, the online investment platform would be a complete solution to investors who wish to operate at their convenience and from the comfort of their home. From a business perspective, the focus would be to lower the cost of distribution, which can be achieved through the online route. Just Trade has now partnered with Axis Bank for an additional payment gateway. Other initiatives like beefing up the MFSS platform are underway.


Moneylife Foundation announces tie-up with ICICI’s DISHA

Under the tie-up, DISHA will provide its services—free of charge—at the office of the Moneylife Foundation six days a week

4 May 2010: Moneylife Foundation today proudly announced its tie-up with DISHA Financial Counselling, a free and confidential service promoted by ICICI Bank. Speaking on the occasion of the Moneylife Foundation workshop on ‘How to be safe and smart with your money’, M N Gopinath, who is on the governing council of DISHA said, “In the last few years, counselling and awareness has gained a lot of currency. This is because, prosperity has brought with it a whole set of problems like a general lack of financial responsibility. As a result, people get caught in huge debt traps. There is a need to prevent this malaise rather than only providing a cure.”

Mr Gopinath congratulated the Moneylife Foundation for its initiative, recognising that there is a bigger need to educate the society at large. “Having spent so many years in this field, I now realise one thing. We have to take care of ourselves. We need to know what benefits us and what doesn’t and how we can better protect ourselves. We need to understand how to plan our finances and how to avoid falling prey to high sales pitches.”

Mr Gopinath has vast experience spanning more than 35 years in the field of finance and banking, having served at key positions in ICICI Bank and Bank of India. He currently occupies the position of director in Bank of India, chairman of Loyalty Solutions & Research Ltd (an ICICI Venture company) and serves as an advisor at the Institute of Finance, Banking and Insurance.

DISHA and Moneylife Foundation will conduct workshops, supported by ICICI Bank, on financial literacy and awareness every Tuesday between 3-6pm at the Moneylife Knowledge Centre. DISHA, one of the pioneering initiatives in this area, seeks to provide solutions to consumer grievances. Under the tie-up, DISHA will be extending its services, free of charge, at the office of the Moneylife Foundation six days a week.

Speaking about the tie-up, Ms Anita Pai, head of customer services group at ICICI Bank said “DISHA is ICICI Bank’s contribution to counselling customers. But we can only scale this up with partners who have similar objectives. Moneylife Foundation provides the perfect avenue to help us reach a lot more people. We are very happy to be in this partnership with Moneylife Foundation and look forward to making a difference.”

DISHA endeavours to assist vulnerable and disadvantaged consumers in a financial crisis by analyzing their situation, counselling and advising, and providing options. DISHA is committed to providing education to customers on the proper use of consumer credit as well as basic money management skills helping them stay financially healthy.

Mr Gopinath’s talk was followed by an interactive working session on finance, by Mr Debashis Basu, Editor of Moneylife and Ms Sucheta Dalal, consulting editor of Moneylife. Ms Dalal spoke on how to avoid losses by staying away from certain kinds of investments like chain marketing and pyramid schemes. She also spoke about the implications of credit card transactions and gave the audience some tips on choosing banking and insurance services sensibly.

Mr Basu told the audience that investment does not have to be difficult and complicated if one was clear about the basic objectives, avoided obvious potholes and followed a sensible and consistent investment policy. He also explained at length the enormous power of compounding one's income.


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