From cost center to strategic lever for air transport

 

A recurring and costly problem

Baggage handling is one of the most cost-intensive areas for an airline.
The journey of a piece of baggage, from check-in to delivery on the carousel, is in reality a complex process, subject to multiple external influences :

• exceptional weather conditions,

• airport infrastructure breakdowns,

• industrial action and strikes,

• failure of critical IT systems.

Each of these factors can cause disruptions and compromise real-time baggage tracking, with a direct impact on operations and the passenger

experience..

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The scale of the problem: 2024 figures

In 2024, the airline industry carried 5.2 billion passengers worldwide.
Despite our efforts, the rate of misdirected baggage (delayed, lost or damaged) remains at 6.9 per 1,000 passengers, or around 36.1 million pieces of

affected baggage.
The average cost estimated by IATA to handle a misdirected bag (tracking, forwarding, replacement, compensation) is between US$100 and US$150.
Applied to the industry as a whole, this would represent between 3.6 and 5.4 billion dollars by 2024 - or almost 1 dollar per enplaned passenger.
These figures reflect both :

• a colossal financial burden,

• a permanent operational risk,

• and a major source of customer frustration.

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The need for greater system interoperability

Historically, baggage management systems have relied on the exchange of one-off messages (notifications, statuses), often inefficient on a large scale.
However, the evolution of this model now requires passenger carriers to adapt their information systems (IS) in depth, in order to collaborate more closely with the IS of field operators (handlers, airports).

The answer lies in structured interoperability, based on :

• exposure of standardized services (APIs, microservices),

• the use of open integration models,

• and the implementation of shared IS governance, to gradually standardize interfaces.

 

The urbanization of exchanges is an essential lever for building digital ecosystems. :

• more resilient to unforeseen events,

• more agile in integrating new services,

• more customer-oriented, with transparent and reliable baggage tracking.

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Towards a new paradigm: autonomous luggage

A more profound transformation is already underway: baggage is gradually becoming an autonomous service, dissociated from the airline ticket.
Carriers (airlines and railways) are beginning to manage baggage as a logistics product in its own right, capable of being handled,

transported, tracked and delivered independently of the passenger.

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Expected benefits :

• Commercial enhancement: premium services, door-to-door delivery, insurance options.

• Operational optimization: reduced hold loads, differentiated baggage flow management.

• Enhanced customer experience: more choice, transparency and personalization.

 

This model is part of a broader trend towards modularized travel, where each component (transport, baggage, ancillary services) can be individualized, priced and enhanced with digital services.

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Conclusion: a strategic challenge and an opportunity

The quality of information systems and the fluidity of interoperable exchanges are set to become key success factors in baggage management.
 

New B2C systems are already emerging to meet this need, and it's their ability to :

• produce reliable results,

• integrate into an open ecosystem

• and communicate effectively with passengers,

that will determine their adoption by the market.

 

In short, the move away from endured baggage to controlled, autonomous and enhanced baggage is a strategic opportunity for the transport industry.

It's both a technical and organizational challenge, and a tremendous way of creating value for both carriers and their customers.