The pursuit of perfection – baggage-focused innovation

It’s the worst-case scenario for any traveller. After disembarking from their flight, they head to the baggage carousel, where they wait around for a while watching suitcases get reunited with their owners. Theirs, however, does not turn up. They wait a little longer before resigning themselves to the fact that it simply isn’t going to. Whether the bag has been temporarily misdirected or outright lost, there can be no doubt that they are in for a world of hassle and possibly a ruined holiday to boot.

Clearly, lost luggage is an issue for airlines too, bringing with it compensation costs and a likely dent in their reputation. For any operator that cares about the customer experience, baggage mishandling is likely to prove one of its most abiding concerns.

The problem has at least receded somewhat in recent years. According to SITA’s annual baggage report, mishandling has dropped by 61.3% since 2007, when, 18.88 bags were lost per 1,000 passengers; that figure has fallen to 7.3, saving around $18 billion.

On the beaten track

However, in the wake of strong passenger growth, baggage mishandling experienced a slight uptick in 2014, reminding the industry that there remains work to be done. In total, mishandled bags cost the industry $0.73 per passenger, which has the potential to affect average profits – standing at $11.61 per passenger – by a significant amount.

While only 5.5% of the bags in question turned out to be lost or stolen, with a further 14.3% having been damaged and the rest merely delayed, any disruption at all to baggage handling is evidently less than ideal.

The industry has therefore been rolling out various initiatives that are designed to further slash the incidence of problems. A number of airlines have introduced self-tagging for luggage or self-service bagdrops, tapping into passengers’ desire for more control. Others have invested in bag-system automation, along with solutions that allow the passenger to track their belongings through every stage of the journey.

One carrier in particular has made strong inroads into this space. Over the past year or so, the German airline group Lufthansa has introduced several pioneering initiatives that stand to improve the customer experience around their luggage. Working under the slogan ‘Rethinking air travel’, it aims to make a positive difference at every stage of the travel chain. As Björn Becker, Lufthansa’s director of product management and passenger services, explains, the airline considers baggage handling a top priority.

“The misrouted baggage ratio at Lufthansa is very low due to our high process-quality standards,” he says. “However, as the situation for the passenger is very bad in cases of misrouted baggage, we focused on this topic, and want to make sure that we at least have an efficient and convenient recovery service. In parallel, we implemented improvements in the back-end processes – worldwide IATA RP1800 compliance, for example – to further minimise the risk of lost or misrouted baggage.”

Last year, the airline joined forces with the luggage manufacturer RIMOWA to deliver the RIMOWA Electronic Tag. Billed as the first fully integrated mobility solution for luggage, the tag is based on digital technology that is directly integrated into selected RIMOWA suitcases, replacing the typical paper label. It enables travellers to check in their bag, via their smartphone, from the comfort of their own home. 

Having been piloted last autumn to great success, the electronic tag was named ‘Best Baggage Initiative’at a conference in September 2015 and hit the market in March this year. For customers without a RIMOWA suitcase, other options are available too, such as printing a baggage tag at home and placing it in a transparent sleeve, thus saving time at the airport. The airline’s five-year goal is to have HomeTags on at least 60% of all baggage.

“The electronic tag is one of our new self-tagging solutions that enables the passenger to pre-prepare the baggage in order to ensure a smooth, fast process at the airport,” says Becker. “A bag pre-tagged with HomeTag or RIMOWA Electronic Tag can be dropped at the self-service bagdrops at the Lufthansa Hubs within seconds, and the drop-off at the counter is also easier and faster.”

Lufthansa has also developed a mobile baggage tracker that allows passengers to locate their luggage at any given moment. Part of the Lufthansa app, it informs travellers exactly when their bags will arrive on the carousel and saves them waiting around needlessly. It also enables them to register their belongings as lost in the event they do not arrive.  

“The baggage tracker enables the passenger to track their bag along the journey in the Lufthansa app,” explains Becker. “In the rare situation that a bag is misrouted, the passenger can then file a delayed baggage report directly from the app.

“They are notified by Lufthansa via SMS on arrival and can go directly to our service, where the report can be filed within five easy steps, with all relevant data already prefilled; no more waiting at the baggage belt, or lost and found. This service has been rolled out at every Lufthansa station worldwide.”

If the passenger does need to file this kind of report, they may also benefit from instant compensation, which has been designed to streamline the famously laborious process of compensation. Typically, passengers need to apply via letter or email, and wait days or even weeks to get their money back; this service, debuting in April, will enable a far swifter resolution.  

“The passenger can be directly compensated in case of misrouted or damaged baggage, flight irregularities and so on,” says Becker. “In addition to the regular compensation methods, such as cash and frequent-flyer miles, we will also offer retail vouchers.”

Appy travels

What is striking about all these functions is that they are linked to Lufthansa’s mobile app. For many passengers, smartphone use is a way of life; nothing could be more intuitive than interacting with their airline digitally.

According to SITA’s ‘2015 Airline IT Trends’ survey, over 75% of airlines are planning major programmes to deliver services through smartphones by 2018, with 67% saying they will offer a highly personalised smartphone-based booking experience and 64% saying they will provide information updates relating to baggage. User rates are growing too: 9% of passengers used mobile check-in in 2014 – twice as many as had done so the year previously.

For Lutfhansa, the app is a central point of focus, a digital travel companion. After downloading it on to a smartphone, tablet or Apple Watch, passengers can access a comprehensive range of digital services.

“We offer a flight monitor with active notifications in case of changes; boarding start or baggage belt notifications, and a mobile boarding pass [MBP],” says Becker. “We are currently working on the possibility for the passenger to access the Lufthansa Lounges or even board the plane contactlessly using their MBP – no more taking out boarding passes or switching on phones, just leave the smartphone on in your pocket. We are also working on biometric identification for this that, if possible, will be integrated with immigration preparations in order to enhance the experience.”

In implementing features of this kind, the airline must of course undertake a careful balancing act, in that greater convenience for the passenger can never come at the cost of safety.

“The major challenges are always twofold: on the one hand, to stabilise new technologies in a way that passengers can use them with 100% availability and reliability; and on the other hand, to make sure that [levels of]security and regulatory compliance are 100%,” Becker explains.

Lufthansa’s new features, however, have successfully overcome these preliminary hurdles, with most of them already implemented or in the roll-out phase. This baggage-focused investment is set to continue, with a number of additional initiatives planned for 2016.

The airline has also brought in various solutions for personnel involved with baggage handling, such as a new-generation WorldTracer system developed in conjunction with SITA. This desktop application allows ground handlers, airport operators and airlines to access comprehensive baggage data that can be integrated with their own reservation system to trace a missing bag.

However disparate these features may appear, they share a common goal: to reduce stress for the passenger. In an ideal world, no mishandling would occur – luggage would never be misdirected and nobody would experience misadventures on the baggage carousel. However, with the industry yet to find a perfect solution, airlines can only seek to fine-tune their current systems, improve passenger convenience and quickly resolve any incidents that do arise.

“We aim to enhance our personal hospitality with digital service elements, integrated over all touchpoints,” says Becker. “Lufthansa is convinced that these services enhance the passenger experience as they make it more convenient – through better waiting times, for example – and always put the passenger in control of their journey.”