Airlines cut mishandled baggage by 23 per cent in 2025, saves millions despite record travel

The global aviation industry significantly reduced mishandled baggage in 2025 with the mishandling rate falling by 23 per cent despite record passenger traffic However baggage mishandling still cost airlines an estimated USD 63 billion during the year according to the SITA 2026 Baggage IT Insights reportThe report released on Monday further highlighted that the industry handled a record 5 billion passengers in 2025 up from 48 billion in 2024 while bringing baggage mishandling below prepandemic levels for the first timeMishandled baggage falls to a record lowAccording to the report the global mishandled baggage rate declined from 63 bags per 1000 passengers in 2024 to 49 bags per 1000 passengers in 2025 The total number of mishandled bags also dropped by 19 per cent from nearly 30 million to 24 million bagsDespite the improvement SITA estimates that mishandled baggage continues to impose a substantial financial burden on airlines with the average cost per mishandled bag rising to USD 260 replacing the longused industry estimate of USD 150The report noted that with airlines earning an average net profit of just USD 8 per passenger a single mishandled bag can erase the profit generated from more than 30 passenger seats while five mishandled bags can eliminate the profit from an entire flightDigital technologies driving improvementsSITA in their report further highlighted the industrys progress toward the wider adoption of digital technologies rather than a single innovation It also highlighted that the advancements such as realtime data sharing artificial intelligencepowered baggage routing biometric bag drop systems and connected passenger devices have collectively improved baggage handling efficiencyNicole Hogg Portfolio Director for Baggage at SITA highlighted that baggage handling is evolving from a logistics challenge into a digital servicePassengers expect to know where their bag is at every moment and theyre 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 Hogg saidNew technologies deliver measurable resultsAccording to SITA integrating Apples Find My feature with its WorldTracer baggage management platform reduced permanently lost luggage by 90 per cent in its first year and shortened delayed baggage recovery times by 26 per cent The company has also integrated Googles Find Hub shareitem location feature into WorldTracerMeanwhile Thai Airways used SITAs Auto Reflight solution to reduce baggage rebooking time from around three minutes to just one second per bag across nine airportsAirports need smarter operationsSITA CEO David Lavorel said airports are increasingly operating near their maximum physical capacity making digital technologies essential for managing future growthHe said data analytics AI and predictive operations enable airports to optimise existing infrastructure across checkin security boarding gates baggage handling and apron operations without requiring major physical expansionDelayed bags remain the biggest challengeMoreover the report further found that delayed baggage accounts for around 70 per cent of the total cost associated with mishandled luggage largely due to expenses related to recovery rerouting and final deliveryFor lost or damaged baggage compensation payments account for up to 70 per cent of associated costsTransfer baggage continues to be the leading cause of mishandling representing 39 per cent of all cases in 2025 although this improved slightly from 41 per cent in 2024AI investments set to accelerateLooking ahead SITA further said that airlines are planning further investments in digital baggage management According to the reportThree out of four airlines plan to invest in artificial intelligence over the next two yearsHalf of the airlines intend to provide passengers with realtime baggage tracking updatesIndustry adoption of baggage tracking under IATA Resolution 753 has now crossed the 50 per cent mark with full compliance targeted by 2027The report also points to future innovations including baggage tagging from home offsite baggage drop facilities such as airport car parks and systems that could allow baggage to travel separately from passengers further transforming the air travel experience