Back to Air Transport IT Review - Issue 1, May 2010
2010 Baggage Report
Continuing the fall in mishandled bags
For the second consecutive year, the number of mishandled bags fell worldwide, according to SITA's 2010 Baggage Report. In 2009, airlines reported just over 25 million mishandled bags globally - down almost a quarter from 2008, and down 40% from 2007. That represents year on year savings to the industry of US$ 460 million.
The sixth edition of SITA's Baggage Report once again explores progress being made to reduce the volume of baggage mishandled, lost or stolen. The achievements recorded during 2008 were strengthened during 2009, with just over 25 million mishandled bags globally. That represents 11.375 mishandled bags for every 1,000 passengers - down 23.8% (or 7.8 million bags) from 2008, and more than 40% (or 17.4 million bags) from 2007.
This improvement saved the industry some US$ 460 million year on year. Nonetheless, lost and mishandled baggage still cost the industry around US$ 2.5 billion in 2009 - a sum it can ill-afford to lose in the current economic climate.
Why the drop?
After five consecutive years of increases, 2009 was the second consecutive year when the volume of mishandled baggage fell globally. Several factors contributed to the decline:
- Fewer people travelling. Fewer people travelled last year compared to 2008, with numbers falling from 2.27 billion enplaned passengers to 2.2 billion. However, the decline in passenger numbers (2.9%) is far smaller than the 23.8% decline in mishandled baggage.
- Fewer people checked in bags to avoid fees. According to the 2009 SITA-Air Transport World Passenger Self-Service Survey, the proportion of passengers checking in baggage has decreased from 82% in 2007 and 2008 to 75.7% in 2009. This trend is especially noticeable in locations where airlines have started charging passengers for baggage.
- Improvements in baggage handling systems. As the cost of mishandled bags climbs - from an estimated US$ 90 to US$ 100 per bag between 2008 and 2009 - airline and airports have worked hard to improve baggage management.
At the same time, the industry as a whole has focused on improvements in baggage processes and systems. For example, SITA's Integrated Baggage Management Solutions are designed to direct, track and trace passenger baggage throughout the entire journey, from check-in to final delivery at the destination.
Technology transformation
Technology is set to change the face of baggage handling and management worldwide. IATA's Baggage Improvement Program (BIP) launched in 2008, proposes solutions that aim to cut baggage mishandling in half by 2012 - generating annual savings to the industry of US$ 1 billion to US$ 1.9 billion. According to the SITA Airline IT Trends Survey 2009, by 2012:
- 63% of airlines say they will implement self-service bag-tag printing.
- 41% say they will use kiosks to report lost baggage.
- 36% say they will offer unassisted bag drop locations.
Many of these options will be complemented by mobile technology, which will enable travellers to track bags throughout every stage of the journey.
Although charging for checked baggage is a trend that originated with low-cost carriers, full service airlines are catching up quickly - particularly in the US. In the third quarter of 2009 alone, the ten largest US carriers collected about US$ 740 million in baggage fees, more than double the US$ 350 million they collected in the third quarter of 2008, according to the US Bureau of Transportation Statistics.
In fact, checked baggage is now the major ancillary revenue associated with aircraft operations, generating far more revenue than options such as pre-reserved seating and early boarding, although still substantially less than frequent flier programmes.
Better experience
The imperative behind the continuing work to improve baggage management solutions is not only explained by money lost in unnecessary fees. Most importantly it helps improve the industry's reputation, while enhancing the overall passenger experience.
For more, see www.sita.aero/baggage_report.
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