New Delhi, June 30 (IANS) Airlines have sharply reduced mishandled baggage rates in 2025 by 23 per cent due to digital transformation efforts, but the problem still costs the industry $6.3 billion a year, a report said on Tuesday.

The report from the air transport industry’s tech engine SITA highlighted a widening gap between passenger growth and baggage infrastructure.

The report said mishandled baggage rates dropped as digital transformation — real‑time data sharing, AI routing, biometric bag drops and connected passenger devices — began to take hold.

However, 24 million bags were still mishandled in 2025, when 5 billion passengers travelled globally. The report added that each mishandled bag carries an average cost of $260, and with net profit averaging $8 per passenger, one mishandled bag wipes out the profit from more than 30 seats sold and five erase the profit of an entire flight.

“Passenger volumes are rising faster than the infrastructure designed to handle them…Across the longer term, mishandling has fallen by close to three-quarters since 2007,” the report said.

The report highlighted that delayed bags account for about 70 per cent of total mishandling costs, mostly operational expenses for recovery, rerouting and delivery.

“For lost or damaged bags, up to 70 per cent of the cost is compensation. Transfers remain the core mishandling driver at 39 per cent of cases in 2025, down from 41 per cent the year before,” it added.

“Passengers expect to know where their bag is at every moment, and they’re increasingly willing to help us track it. The next phase is about bringing the technology we already have to every transfer, every handler and every airport, offering greater visibility and connecting every step of the journey,” said Nicole Hogg, Portfolio Director Baggage, SITA.

The report said that three in four airlines plan to invest in AI over the next two years, and 50 per cent of them plan to give passengers real-time baggage updates. Industry-wide baggage tracking under IATA Resolution 753 has now passed the 50 per cent mark, with full compliance targeted for 2027.

—IANS

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