Millions saved: Baggage Report 2012
Airlines saved millions last year thanks to better baggage handling. But transfer bags are a pinch point.
The air transport industry has achieved its highest rate of successful baggage delivery since global records began. The eighth annual SITA Baggage Report shows that the number of mishandled bags dropped 20.3% in 2011, compared with 2010.
For passengers, this is excellent news. For the air transport industry, it represents a saving of US$650 million to the air transport industry over the previous year.
SITA's report reveals that the mishandled rate has more than halved in the last few years - with 8.99 bags per thousand mishandled last year compared to 18.88 in 2007. The number of bags mishandled dropped by 45.1% to 25.8 million. Over the same period, the number of passengers increased by 15.3% to 2.87 billion.
"The fact that the industry has halved the mishandled rate over the past five years is an enormous achievement. It has benefited millions of passengers and directly delivered improvements to airline earnings," says SITA CEO Francesco Violante.
"These results are due to concerted efforts by airlines, airports and ground handlers who have leveraged the IATA Baggage Improvement Program; the increased focus on standards and best practices by the Airports Council International; and the implementation of sophisticated baggage management solutions such as SITA BagManager."
But the report delivers a message of caution. Even though the cost to the industry of mishandled bags has dropped 20% in just one year, more than US$ 2.58bn continues to be wiped off the bottom line at a time when airline profits remain under pressure.
More than half of that sum is the cost of what seems to be the industry's Achilles heel - the mishandling of transfer bags. Typically, these bags go astray when passengers and their luggage are moving from one aircraft to another, and often from one carrier to another, en route to their final destination.
They accounted for 53% of all delayed bags in 2011 - rising slowly year on year from 49% in 2008. This costs the industry at least $1.36bn a year, says the report.
This comes at a time when transfer traffic is growing, with more routes being rationalized into hub and spoke operations. Increasing traffic clearly places greater stress on bag handling operations. And if the trends continue, by 2020 transfer bags will account for more than 60% of all delayed bags unless tackled by the industry.
The rapid adoption of mobile devices, and the evolution of 'me-centric' passengers, have created demand for accurate real-time information to be delivered to handheld devices, says the SITA Baggage Report.
At the same time passengers expect self-service bag drop and tracking. Meeting these expectations demands an improvement in the quality and accuracy of data in relation to baggage movements. And that data needs to be shared more widely and proactively with all stakeholders.
But the industry can only deliver on the self-service promise of more information and control to passengers when data sources are in sync. Billions of messages are exchanged every year between airline, airport, and ground handler systems to process baggage handling.
Making more effective use of this data is key to future improvements. All stakeholders - ground handlers, airlines, and airports - have to be part of a collaborative process to ensure synchronicity of data flow behind the scenes.
The industry is well aware of the issue. Baggage processing and management is considered a priority investment area for 65% of airports taking part in the 2011 Airport IT Trends Survey, with 20% flagging it as a high priority.
At the same time, IATA is replacing the successful Baggage Improvement Program (BIP) with the launch of the Baggage Quality Program next year. This is designed to speed up the journey of passengers and their luggage by ensuring that everyone in the air transport ecosystem has a minimum and standardized set of data, regardless of where they are operating.
With improved data sharing, and innovative new IT services, mishandling rates can continue to be reduced. New services are already being introduced to keep passengers better informed about their bags.
Behind the scenes, highly automated and smarter baggage-handling technology is becoming more widespread. Baggage applications are beginning to communicate with airline departure control systems. Real-time tracking and alert initiatives will play a critical role in reducing mishandled luggage in the future.
A concerted effort is by the aviation community to address the big issues behind the scenes - particularly for transfer bags. This is likely to deliver sizeable cost savings in the future and keep in step with passenger expectations for a more enjoyable travel experience.
"SITA will continue to work with the community to ensure that the best processes and technologies are used to conquer the challenges," says Violante.
- Historically baggage data provisioning has focused on the originating airport baggage handling process, with little or no data about actual outbound loading, transfer or arrival activities.
- SITA's bag messaging strategy will make data available at each stage of the bag journey, in sync with IATA's BQP vision for bag status monitoring throughout the process.
- The future will be one where more intelligent use of baggage information prompts the evolution of more systems to generate more bag tracking points. In turn, this will provide the air transport stakeholders with timely business intelligence to support their decision making.
- Enhanced baggage data generation, distribution and integration - along with more intelligent use of the information - will help the air transport industry to continue to make additional improvements to the baggage process.