Airlines Compensation Policies Satisfy Passengers in The Event of Lost Baggage

Airport and Airline Relationships

Airlines Compensation Policies Satisfy Passengers in The Event of Lost Baggage

 Aviation industry contributes immensely to the sustainable growth in the world. The expansion of air transport has improved more diversified exports and imports base across the globe, facilitating continued amplification in all sectors of the economy. Practical strategies are required to safeguard and enhance the security of this form of transportation, with the aim of attracting and boosting further development. This chapter will review secondary sources of information and get arguments from various scholars regarding the topic under study.

Annual Growth of Air Transport

       Air transport is the fundamental pillar of the economic development because it integrates the marketplace, making it easy for the exchange of goods and services. The industry has invariably grown with time due to affordability (O’Connell and Williams 2016, p.3). As the sector continues to evolve, its unparalleled security measures need reconsideration. The aviation security experts understand that for the objective of securing the passengers to be achieved, it is paramount to address the small issues before they become real threats (O’Connell and Williams 2016, p.5).

The industry of air transport continues to grow, with significant improvements regarding financial base and infrastructure being incorporated in operation.The security measures to control the traffic within the airports have also experienced development. Some of the areas where technology has taken place are in the checking of luggage and control of queues (Clark and Stoddard 1996, p.26). The automation system has reduced the clearance time which people used to spend while waiting to be served. The flow of activities in the airports has continuously allowed more people to be served at a given time, hence improving the revenue collected by the government (Chao and Li 2017, p.30). Consolidation of airline transport is well witnessed in the mature and well-established markets in the world. Bradley (2010,p.60) affirms that developed nations have dominated the industry, with the companies operating this type of business injecting a massive amount of returns, due to improved facilities. The scenario is different from the developing nations, where performance is stalled by lack of proper human capital and insufficient funds for expansion (Bowen et al. 2003, p.200).

Cargo air transport has fallen below expectation while the passengers’ transportation has continued to increase with the hope of doubling the number ferried to various destinations by the year 2035(Koczor and Takacs 2008, p.700).Further, Bradley (2010, p.68) identified that the industry supports more than 63 million jobs globally and contribute close to US$2.7 trillion GDP in the world.Although the investment has attracted most of the nations and private investors, not all regions have experienced similar growth. For example, Asia-Pacific line posted a profit of US$900 million in the years 2016 while the African airlines lost approximately US$800 million (Prassl 2014, p.80).

The number of passengers that were ferried in the year 2016 increased by 6.8%, in comparison to the previous year (Correia 2014, p.46). It was also noted that the departure rate rose by 3.7%, hence boosting the performance of the industry (Curtin et al. 2007, p.90). Asia –Pacific region had the highest traffic accounting to a rise of 10.2% compared to the year 2015(Evans and Scafer 2011, p.290). Some of the factors that contributed to this growth were; the favorable political environment in different nations, improvements of tourism sites which attracted new people and stable policies that necessitated international trading (Feng 2007, p.1300). The figure below indicates passengers’ traffic increase of 7.4% for the year 2016(Evans and Scafer 2011, p.290)

Figure 1: The graph showing passenger traffic (Evans and Scafer 2011, p.290)

The information presented in the graph above express the kilometers performed by each passenger in relation to revenue. Between2010 and 2016, there has been a gradual increase which signifies animprovement in the performance of the airline industry. The projection is estimated to obey the linearity which has been maintained for the past five years. According to Feng (2007, p.1310), the industry is coming up with more improved strategies to control traffic and manage finances, hence increase the return on capital.

Airline Baggage loss and Cost

The survey conducted by Graham and Metz (2017, p.110), the rate of mishandling baggage has improved with time. The research affirms that the figures of mishandled bags reduced from 8.99 per 1000 people to 8.83(Kelly et al. 2005, p.704). For the past six years, the drop was recorded to stand at 44.5%, which is a good improvement compared to other years(Kelly et al.,p.710).The airline industries lose close to US$2.1 billion per year, due to inefficiencies in controlling the congestion at the checking and loading points(Koczor and Takcs 2008,p.70). The figures give an accurate reflection of brighter future in the airline industry, where more security measures are yet to be engaged to bring unexpected loses to zero rates (Mills 2017, p.157).

Research conducted by Kelly et al. (2005, p.700) for top 100 performing airlines in the world indicated an improvement in handling the bags. Among the highest performing were Asia, whose baggage mishandling reduced by 43% for the past six years, North America 56% and Europe 43 %( Leczykiewicz 2015, p.234). According to Prassl(2014,p.80), more efforts are needed to mitigate frustrations from the passengers who entrust the flight company to guarantee the security. In response to the previous experiences of loses, some of the researchers such as Prassl (2014, p.60) have recommended incorporation of technologies like Bag Smart, which can send an ominous warning of missing bags. The assertion put across by this scholar elucidate that the technology can reduce theft of luggage by 60% and also lower the delay at checking points.

Various factors such as transfer mishandling, tagging,and loading errors contribute to baggage lose (Riggins and Mukhopadhyay 1994, p.40). The trend affects the business indirectly, by losing trust with its passengers. The industry’s image is tainted hence travelers reduce their trips, therefore reduction of revenue by the specific companies in the air transport business (Sample et al. 2004, p.276). According to International Air Transport Association (IATA), the year 2018 will experience more coordinated methods of handling the customers’luggage (Kelly et al. 2005, p.704). They aim to track every load from start to end, to lower the enormous cost which the company incurs before reuniting the owner with the delayed or lost property (Sellner and Nagl 2010, p.328). However, the airline industry is facing the challenge of increasing passengers, with the year 2018 projected to record 4 billion travelers (Bowen et al. 2003, p.200).The new improvements will ensure that the missing bags will go near zero. The graph below indicates the number of passengers and the rate of baggage mishandling (Tatazzol et al. 2016,p.220))

Figure 2: The graph showing the number of passengers and the rate of baggage mishandling (Tatazzol et al. 2016, p.220)

The combined line graphs show that the number of passengers has been increasing linearly from the year 2011 to 2016. Also, a continuous decrease of mishandled bags is witnessed over the years, with a distinct trend observed between the years 2014 to 2016.

Airport Baggage Handling Process

One challenge facing the operations at the airports is control of curbside traffic. According to (Zoltan 2015, p.234), the picking and dropping off luggage at the terminals create a pool, which impedes the general flow of traffic. The convergence of people at a common point, some departing while others are arriving increase the chances of lose (Skorupski and Uchronski 2015, p.170). Improved technology will continue to play a significant role in controlling the passengers at the airport (Prassl 2014, p.70).The security measures at airports across the world have been heightened due to threats of terrorists and sneaking of illegal goods (Truxal 2017,p.340). Before the passenger is allowed to board the plane, the baggage is checked for any explosive or hazardous material which could risk the lives of others.

Technology such as the use of x-rays has been in use for quite some time in the industry (Tompkins 2016, p.129). World tracer management is one of the tools utilized to trace the lost bags. The system is connected to other airports and allow the search for the lost item for up to one hundred days (Wyld et al. 2005, p.390). The owner is entitled to use the interface by entering the transaction number, to enable monitoring of the luggage. The exchange of information is facilitated to mitigate the chances of frustrating the passenger (Zoltan 2015, p.230).Furthermore, AHL lostbag report is a software that is explicitly designed to aid in controlling the movement of bags (Wyld et al. 2005, p.390). In case the owner realizes some items are missing, it allows him or her to alert the security team by reporting through the application.  Moreover, OHD found baggage report is also designed to inform the customer immediately the lost item is found, which is accompanied by the reason for lose(RLC), to clear the dilemma which could taint the image of the business(Tompkins 2016,p.140).

According to Moore (1991, p.74), screening of passengers to detect any form of metal has been in use for long. The detectors are designed to alarm in case the baggage has any form of a metallic item, which undergoes further scrutiny to ascertain the exact identity.With the increased traffic at the checkpoint, it has become difficult to handle all the cases appropriately. The security personnel are overworked hence compromising the quality of the services (Moore 1991, p.74)

Factors Which Causes Baggage Loss

Although the airport security team and other staff make considerable efforts to attend to the surging number of passengers on a daily basis, the incidences of misplacement are still reported(Zoltan 2015,p.230).One of the significant problems that have been said to contribute to this issue is tagging error. Before any bag leaves the airport, it has to be labeled with the place of origin and the final destination. In most instances, the point of landingis always missed, hence the possibility of being received in a different place. The passengers are usually encouraged to cross check their baggage before departing, to minimize the chances of losing (Kelly et al. 2005, p.700). Due to the pressure from workload and ever-increasing population, it becomes tiresome for the staff to keep tight vigilant on what they charge on the plane. They might misplace or even forget to load, for lack of proper control of traffic (Graham and Metz 2017, p.110).

Arrival station mishandling has contributed to 3% of the loses witnessed in the industry (Bradley 2010, p.60). He affirms that the high number of arrival is the primary reason for the experienced loses. Also, passenger bag switch and lack of modern technologies have left the travelers vulnerable to losing their items. Transfer of flights is another element that increases the chances of lose. The owner has to be keen to check in all the baggage before they are loaded to a new plane (Sellner and Nagl 2010, p.328).Although the security of the travelers’ items has recently been an issue in the air transport industry, the declining complaint is an indication of improvement.

Regulation of the European Parliament.

In the wake of deteriorating security in the airports, the EU parliament came up with resounding regulations that have ensured the protection of the passengers. They are regularly updated to conform to the standards and the modern technologies. It is a universal trend which is being appreciated by all countries to safeguard their populace and tourists (Correia 2014, p.50). Aviation security regulations were adopted to monitor air transport activities and their compliance. The operation is supplemented by another set of rules, to ensure the players in the market do not exploit the passengers (Curtin et al. 2007, p.110). According to the framework, every country is responsible for securing the people departing from its land. The administration should put stiff measures to ensure nothing harmful happens to the people on board. Second, all baggage and cargo must be screened before loading (Evans and Scafer 2011, p.292). Subjection to this procedure eliminates the doubt of dangerous materials which might cause damage. The EU parliament is further detailed that the member states have the right to heighten the security whenever they find it necessary.

Montreal Lose Baggage Regulation

The Montreal convention was convened in 1999 by the diplomats to discuss and amend some of the regulations which served the airline industry for long (Feng 2007, p.1300). The first Warsaw regulations did not protect the passengers from the perils which could occur while on board. The new changes attempted to bring uniformity and predictability to the policies (Graham and Metz 2017, p.110). Although Montreal regulation introduced modernization in some way, part of the preceding provisions that controlled the international market was reserved. The new regime protects the passengers by bringing in a two-tier system (Kelly et al. 2005, p.704). The airlines are required to compensate an equivalent amount to the lost item. In the first Warsaw regulations, the passengers had to provide evidence of the willful neglect of the airline carrier, to be refunded(Koczor and Takacs 2008,p.72).

Airline Compensation Policy

All airlines in the world have a plan to compensate the passengers in case their baggage is lostalong the way (Prassl 2014, p.78). As opposed to the past where the traveler had to produce enormous evidence to prove the lost goods, the current security measures can determine the validity of any claim placed by the victim. As a way to protect the customers, the policies are put in place to ensure every item is equally refunded(Riggins and Mukhopadhyay 1994,p.45). The industry is held responsible for theloss in case preliminary indications show the connection between the staff and mishandling of the luggage. However, if it turns out to be the fault of the owner, paybackmight not be guaranteed (Sample et al. 2004, p.277).

Current Innovations to Reduce Baggage Loss

Airports are investing in modern technologies to reduce the chances of bag mishandling and lose. According to the study conducted by Feng (2007, p.1300), it was identified that mishandling contributed to 83% of the cases reported at the security desk. Although the complaints of lost items have reduced by 50% for the last decade, it still raises concern to the people who are stuck at the airport, worried about their security (Sellner and Nagl 2010, p.324). Various innovations have been put across to protect the movement of items across the industry. Bag2 Go is the current technology which is used to track the location of the pack(Tatazzol et al. 2016,p.220). Through the use of RFID technology, the chip connects the airline system with the user’s iPhone application which can be controlled from the screen. The passenger can determine whether the parcel was loaded or not, and even locate it by use of GPS along the journey (Truxal 2017, p.400). Furthermore, Bag Journey Application is a software which updates the progress of the luggage over the entire route. It continually gives report both on the airport and the staff operators on board on the status of the baggage (Tompkins 2016, p.134).  Others are like Smart Bag Tags and RFID in action. They have revolutionized the air transport to give the passengers thrilling experiences.


Various authors have affirmed that the airport security is considerably improving as opposed to some of the years back (Truxal 2017, p.340). With continued investment in modern technologies, cases of lost item shave reduced by 50%. The year 2018 is expected to witness more reduction of the cases, due to new inventions in the industry (Zoltan 2015, p.230). It was also noted that the passengers served per given time is increasing with time, hence improving the revenue collected in various airports.The literature reviewed confirmed the issue of understaffing is suppressing delivery of efficient services in different ports. Although broad information has been covered, the secondary data that were consulted did not provide the effects of baggage lose on the economy. Consequently, it was noted that various technologies such as Bag2Go and RFID were discussed as alternatives to improve baggage security (Wyld et al. 2005, p.380).