RFID Tags Can Find Stray Bags, But Can Airlines Afford Them?

RFID promises to be a simple solution for baggage handling, but is technology too expensive for cash-strapped airlines to integrate?


For three days last Christmas week, Janet Suckling haunted the Delta Air Lines baggage area at the Cincinnati/Northern Kentucky International Airport waiting for the arrival of a bag in which her wedding dress and her husband-to-be's tuxedo had been packed.

''They had no idea where the bag went,'' she said. ''I spent all three days crying.''

Similar scenes play out constantly in airports around the nation. The slowly circulating luggage carousel empties until one or two unlucky souls remain, staring in dismay and anger as it dawns on them that their luggage is not going to arrive.

For the last several years, the airlines have envisioned sharply reducing this infuriating problem with new radio frequency identification, or RFID, tags that identify and track items with a precision unmatched by today's bar code scanning systems.

Advocates of the new technology say that it is ready for use. But major airlines would each have to invest tens of millions of dollars to adopt RFID luggage tracking. Most are in such dire financial straits that that kind of money could be as hard to come by as legroom in coach.

''Airlines are concentrating on keeping their doors open for business,'' said Bill Allen, a spokesman for Texas Instruments, a supplier of RFID devices. ''Until it's required, I don't think airlines are going to have an incentive to roll it out throughout their entire system.''

Yet by some estimates, the investment needed to move to radio tag technology could be recouped remarkably quickly.

Today's bar code scanning systems fail to identify as many as 15 percent to 20 percent of the bags moving past automated checkpoints, leaving increasingly understaffed baggage handling crews to identify visually bags by their tags and to redirect them to the proper flights.

The industry tracks its bag-handling performance by measuring bags lost per 1,000 customers. While that number was below five in 2004, that stills adds up to millions of bags going astray annually. Chasing down misdirected luggage and paying claims on lost bags can cost $100 to $200 a bag, according to industry estimates.

In test projects at airports, RFID systems, which use scanners to read codes embedded in microchips sealed inside plastic tags, have accurately identified bags 95 percent of the time they passed a scanner. Such results suggest that RFID systems could eliminate more than two-thirds of the lost baggage problem on average, and perhaps do even better as they were fine-tuned, technologists said.

According to SITA, a technology consulting group for the airline industry that is based in Switzerland, the airlines could save $650 million annually from worldwide deployment of radio tags on luggage.

But how much they would have to change operations before reaping such savings and how soon they could recoup that investment are far from clear.

''The back-end computer systems required to process the data are much more complex than people initially understood,'' said Arthur Filip, managing partner for global transportation in the Americas at Unisys, a leading integrator of information technology for the airlines.

Some airport baggage equipment must be modified to support reliable radio tag scanning. The metal bins that hold bags for loading onto airplanes, for example, interfere with radio signals and might have to be covered or replaced.

Another challenge for airlines and airports is making certain that the luggage tags can be distinguished from tags in other RFID systems being developed to identify aircraft parts used in maintenance and to track movements of airport service vehicles.

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