Having recently weathered a long holiday season, we can all remember the long lines, flight delays and missing baggage. In 2006, the airline industry had approximately 34 million pieces of mishandled luggage (approximately 100,000 per day) and lost approximately $3.8 billion because of mishandled baggage. The outlook for 2007 is not any better. According to the international Air Transport Association (IATA), travelers can expect to see an increase of 20%-25% more lost and mishandled baggage as compared to 2006. 

Ron Haraldsvik

In response, airlines are turning to RFID as a solution. Unlike bar codes, the current tracking method, RFID can track bags across their entire journey, from drop-off to transfer to pickup – without requiring line-of-sight. This increases its chances to be read and verified on its journey from the passenger check-in to the belly of the plane, to its final destination and back to the passenger. With bar codes, baggage handlers still have to manually search for a bag; with RFID, the handlers do not need to see the bag to locate or read its tag.

Air carriers, airports and public safety officials all stand to gain from implementing RFID smart baggage tracking systems.  However, these fundamental changes and ROI for both airlines and travelers will not be realized until the industry is educated about the benefits of RFID technology.    

The onus is on the wireless and RFID industries to spread the word regarding the benefits of RFID implementations within the airline industry.  Replacing barcodes with RFID technology will allow air transport companies to better manage operating expenses and provide higher levels of service and satisfaction to their customers, while operating with higher levels of security.  Fewer mishandled bags reduce flight delays and associated fuel costs, resulting in higher on-time arrivals.  These benefits will become especially critical during busy holiday travel seasons, when long lines and flight delays are at their peak.

The experts agree.  According to Professor David C. Wyld of Southeastern Louisiana University, recently quoted in several articles, “the first carrier that makes the leap to a system-wide RFID implementation will likely enjoy a significant first-mover advantage in this competitive marketplace.”  In fact, overall systems revenue for RFID in airline baggage handling is expected to grow from $11.8 million in 2006 to an estimated $27.5 million in 2011 according to ABI Research.

There are RFID luggage tracking pilot programs currently under way at Hong Kong International Airport, McCarran International Airport in Las Vegas and London Heathrow. There is much work to be done before RFID is implemented at all airports – thus streamlining the travel process and reinvigorating airlines with a positive cash flow from baggage handling operations.

It is estimated that 80 of the world’s busiest airports were responsible for 80% of lost and mishandled bags. The largest 80 airports could make the switch to RFID in less than five years at a combined capital cost of $172.8 million per IATA.  The list includes 32 in the United States, 22 in Europe, 11 in Canada, Central and South America, nine in Asia, two in the Middle East, two in Australia, one in New Zealand and one in South Africa.

Without RFID, the problems will continue to mount.  IATA forecasts that by 2011, the air transport industry will handle 2.75 billion passengers (620 million more passengers than in 2006).

With crammed flights, crowded airports and long lines increasing during the holiday travel season; RFID should soon be cleared for take-off around the world by major airlines and airports and thus save the holidays for millions of travelers.

Haraldsvik is vice president of marketing and industry relations for Alien Technology. ronny@alientechnology.com