The ROI Is In the Bag

Ken Porad related a personal experience illustrating the ROI airlines could achieve by tagging luggage.
Published: November 13, 2006

During RFID Journal LIVE! Canada, our first event in partnership with EPCglobal Canada, I hosted a panel with Nicolas Bondarenco, deputy RFID project manager for the International Air Transport Association (IATA), and Ken Porad, manager of the Automated Identification Program at Boeing Commercial Airplanes Group. As we discussed the need for standards for using radio frequency identification in the airline industry, Ken related an interesting story.

We were talking about the need for standards for tagging luggage. Obviously, there are a lot of passengers who switch airlines as they travel around the world. Nicolas was talking about the potential return on investment that airlines would receive if they did a better job of getting luggage to the right passengers at the end of each trip.

IATA has concluded that baggage tagging could save the world’s airlines $700 million annually (see Baggage Tagging Is a No-Brainer). Ken said that a recent experience he had illustrated the ROI for airlines.

He was on flight from the United States to Japan. A passenger became ill and needed medicine in his luggage. The plane was diverted to the airport in Anchorage, Alaska. It took two and a half hours to pull all the luggage off the plane and locate the passenger’s bag.

The passenger got his medicine and was OK, but by this time, the flight crew had exceeded their allowable hours in the air and the flight had to be postponed until a new flight crew was available the next morning. The airline paid for each passenger’s hotel room and gave everyone a free ticket on a future flight.

“It’s very expensive to pay for hotel rooms and meals for everyone on a flight,” Ken said. “If there had been an RFID tag on each bag, they could have scanned it as it went into the ULD [unit load device, a large metal container used on aircraft] and then pulled out the right ULD and found the bag in a few minutes.”