The Airlines' Bag Reflex

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Bags have the hardest time making it to their destination when they are transferred from one aircraft to another—usually, the baggage handler simply does not get the bag where it's going on time. But in a small number of cases, the fault lies with the printed luggage tag adhered to each bag, and used to track it. Industry experts believe they can eliminate such problems with new technology.

Fitting luggage with Radio Frequency Identification (RFID) tags, which have a near-perfect accuracy rate, instead of the more common paper optical-scan tags, has been hailed as one solution to mishandled baggage. Two airports that have embraced RFID technology are Hong Kong International Airport and McCarran International Airport in Las Vegas. Both report that the systems have dramatically improved their bag-handling.

A dime's differential

Samuel Ingalls, McCarran's assistant director of aviation and information systems, explained that bar codes on optical-scan tags can be easily compromised by everything from a loose printer head to a dirty scanner lens. "From the time someone prints out an optical scan tag, the accuracy starts to degrade," said Ingalls. "RFID doesn't care whether it has a coat of dust on it or not." But universally implementing an RFID system would come at a cost. "Bag tags cost less than a penny to make," said Mayer, "but RFID tags cost upwards of 10 ¢s each."

Yet the expense might buy long-term savings. Eric Wong, HKIA's general terminal manager, estimated that RFID tags would save the airport roughly $3.8 million by the end of the year, both by dramatically cutting the labor costs of towing mishandled luggage and by increasing the amount of baggage its terminals could handle. McCarran's Ingalls also believed cost analysis favored the tags. "It costs $95 or so to reunite a bag with a customer," he said. "In many cases, particularly with short-haul flights, that may be more than the customer paid for a ticket. The economics scale up pretty rapidly."

But updating technology isn't the only way to limit missing bags. Airlines like AirTran Airways (AAI) and Hawaiian Airlines (HA)—which both have consistently low rates of mishandled bags—also employ such low-tech solutions as daily check-in calls to airports, large-print luggage tags to help agents more easily spot errant bags, and pizza parties to motivate front-line workers. Some of the airlines with the lowest rates of mishandled bags attribute their success to the human touch and simple organizational focus. "Everybody has the technology available to them," said Jack Smith, vice-president of customer service for AirTran. But he says other airlines may not put a premium on eliminating baggage mishandling: "Quite frankly, it's a lack of discipline."

A Little Courtesy

Blaine Miyasato, Hawaiian's vice-president of customer services, concedes that for larger airlines, baggage problems can seem difficult to conquer. "It can be formidable. It may well be that when you're dealing with hundreds of stations in hundreds of cities, there isn't that focus." Hawaiian Airlines operates about 175 flights a day to fewer than 20 destinations.

When a bag does go astray, some airlines and airports have tools to keep the situation from turning nightmarish. AirTran uses a computer system that allows customers to trace the progress of their mishandled bags online, and the airline measures how long passengers wait to receive their bags. And Hawaiian takes the unusual step of FedExing some passengers' bags to speed their return.