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MIP
23,4
382
Received October 2004
Revised February 2005
Accepted March 2005
Marketing Intelligence & Planning
Vol. 23 No. 4, 2005
pp. 382-394
q Emerald Group Publishing Limited
0263-4503
DOI 10.1108/02634500510603483
www.emeraldinsight.com/0263-4503.htm
Where is my suitcase? RFID
and airline customer service
David C. Wyld, Michael A. Jones and Jeffrey W. Totten
Southeastern Louisiana University, Hammond, Louisiana, USA
Abstract
Purpose – Examines the adoption of radio frequency identification (RFID) technology in the
commercial aviation industry, focusing on its role in baggage handling and security.
Design/methodology/approach – Draws upon academic and trade literature to provide a current
overview of developments in the implementation of RFID technology in commercial aviation,
particularly focusing on Delta Airlines, an industry leader in the USA in the testing and development
of RFID systems for improved operations in baggage handling.
Findings – Though RFID technology is experiencing widespread adoption across many industries,
commercial aviation seems poised to be a leader in its full-scale adoption in practice. RFID technology
demonstrates distinct advantages over the currently used barcode system for baggage handling.
Practical implications – This paper shows how RFID technology can improve customer service
though better operational efficiency in baggage handling, which has been demonstrated to be an
integral component of an airline’s customer service equation. Academicians and marketing
professionals should both be aware of developments with RFID technology. It is of particular
importance in the airline sector, as improved accuracy of baggage handling can enable air carriers to
close an important service-delivery gap in an increasingly turbulent operating environment.
Originality/value – Little is published in the academic literature about this timely topic. Most of the
published information available is from corporate or commercial sources, and is presented in such
formats as white papers. This paper is a companion piece to the review of RFID in UK retailing by
Jones et al. in this issue.
Keywords Airlines, Air transport, Manual handling, Identification, Radio equipment,
Customer services quality
Paper type General review
Introduction
The system that any business or leisure traveller depends on to track checked-through
luggage efficiently on its way to Alexandria, Louisiana, USA, its namesake in Egypt or
even the small town close to Glasgow in Scotland, is based on correct readings along
the line of a barcoded label, bearing a ten-digit International Air Transport Association
(IATA) number. A commercial research director has claimed that “bags are very well
tracked right now” by the airlines’ barcode-based systems (Morphy, 2004). Yet this is
little consolation when it is one’s own bag that is lost. The baggage tracking systems of
the world’s airlines are mature, and even under the best of conditions, barcode
technology works in correctly reading only eight or nine bags out of every ten. This
means that the airlines continue to devote considerable time, energy and money to
manually intervene to reunite passengers with their bags when the system breaks
down.
The latest example of the problem in the USA was during the 2004 Christmas
holiday season, when severe weather created havoc. For example, the Comair operation
of the major US carrier Delta had to cancel an entire day’s flights due to weather and
computer problems. US Airways also cancelled numerous flights and misplaced RFID and airline
thousands of bags across the American Midwest, creating scenes of mounds of
passenger baggage accumulating at airports along the East Coast, which were
customer service
broadcast worldwide on CNN and other media outlets. An industry consultant noted
that while “weather-related disruptions are beyond the airlines’ control, their ability to
recover quickly is hampered by rising congestion” due to growing capacity (Reed,
2005, p. 5B). 383
The critical link in customers’ minds between seeing their luggage on the baggage
carousel upon arrival and their perception of the quality of an airline’s service offering
has been empirically proven. Each year, professors at the University of Nebraska and
Wichita State University produce their Airline Quality Rating report (Bowen and
Headley, 2004). These researchers’ analytical methodology ranks airline performance
in the United States, based on a weighted average of four key performance measures.
Their benchmarks have been validated as key in determining consumer perceptions of
the quality of airline services. The four measures, drawn from data that the airlines are
mandated to report to the US Department of Transportation, are:
(1) on-time arrivals;
(2) mishandled baggage;
(3) involuntary denied boardings; and
(4) 12 areas of customer complaints.
Several airlines in the US that have performed well in the quality surveys, have made
much of their quality rating rankings in their advertising campaigns. However, as an
industry, it is clear that airlines have a problem. Overall satisfaction with airlines
among US residents has been declining since 1990 according to the The University of
Michigan American Customer Service Index, which is based upon an annual poll of
50,000 customers. Further, airlines scored lower in the index than other major service
industries such as banks, hotels and telecommunications companies.

Airline baggage and the service encounter

Considerable attention has been paid in the marketing literature to the consequences of
an unfavourable “service encounter”. In the airline industry, a case of a passenger’s lost
or mishandled baggage certainly presents such an instance.
One established model explaining customer dissatisfaction in the marketing of
services is referred to as the Gap Model. This suggests that if a difference exists
between a customer’s expectations, and what is actually delivered, service quality is
perceived as low (Zeithmahl et al., 1985). The wider the gap, the lower the perceived
quality, and the more dissatisfaction. Conversely, the more responsive the service
provider is in attempting to recover from service failures, the greater the chance to
reduce the dissatisfaction caused (Fisk et al., 2000; Zeithmahl and Bitner, 2003).
Service failures are a problem in the airline industry, due to its labor intensiveness
(Berry, 1999). Baggage mishandling is a particular problem in light of this model, due
to the nature of baggage delivery being an “all or nothing” event. If the bag is not on
the airplane, the carrier’s ability to recover and “close the service gap” is limited, due to
the logistics and geography involved (if the passenger’s bag is not on the same plane,
there can be no immediate solution to the service failure). For customers on a time
schedule attending an event, such as a wedding, business meeting, or job interview,
MIP obtaining luggage “sometime the next day” is often of no value. If the bag is lost,
23,4 nothing can be done to solve the customer’s problem in the short run.
The consequences of airline baggage handling problems can spread far from the
immediate situation and have far-reaching impacts on the carrier’s ability to compete.
According to recent research reported in Smith and Blend (2005), a dissatisfied
customer will share their poor customer service experience with seven to nine
384 colleagues and friends. Further, once a customer is lost, it will cost a service firm six
times more to obtain a new customer than it would have to retain a present customer.
According to Lovelock and Wright’s (2002) research into the interconnection of
customer satisfaction and loyalty, between 17 and 32 percent of customers intended not
to repurchase when complaints were not settled to their satisfaction.
Several empirical investigations of airline customer service have been reported in
the marketing literature. Scheraga (2004) studied operational efficiencies in customer
service in 38 international airlines and concluded that airlines need to focus on
value-based, core competencies. On-time baggage delivery certainly must qualify as a
core competency for an airline. Bejou and Palmer (1998) studied service failure
experiences among airline customers with regard to the impact of failures on customer
loyalty. Their evidence indicated that the duration of the customer relationship to the
airline was related in a non-linear manner to the effects of service failures on trust,
commitment and likelihood of recommendation. The crucial period for losing
customers was during a 1-2 year period following the initial “honeymoon”. In a more
recent study, Suzuki (2004) investigated the impact of service failure on future airline
choice in which baggage mishandling was one of the three service failures examined.
His results indicated that one-half of the travelers who experienced a “bad” service
encounter did not choose the carrier for a subsequent flight.
Today, intelligent operators, even in their precarious financial positions, are seeing
the shift to RFID-based baggage tracking systems as a solid operational investment
that can produce improved customer service, significant cost savings and
demonstrated ROI. Airlines are also using RFID and other technologies, such as
global positioning, to track “utility dollies” and other equipment around airports
(Anon., 2005). The airports themselves are taking the initiative to shift to RFID-based
systems, sensing the opportunity to produce better traveler satisfaction with their
experience at a specific airport. In a deregulated world of airline and airport choices,
these entities are combining forces to enhance customer service and give them a
competitive advantage, perhaps for a significant window of time until such
RFID-based systems are made mandatory.
This article examines the development and adoption of RFID technology in the
airline industry as a solution for baggage tracking and handling. It examines the
mechanics of how RFID-based baggage tracking works and the benefits it can provide.
After an overview of RFID technology, a case study describes the experience of Delta
Air Lines, the first to commit publicly to taking this particular technological leap
forward. The paper then examines the confluence of technology, terrorism, and even
marketing that seems likely to drive the adoption of RFID-based tracking of checked
baggage throughout the world. The US government is also spearheading the RFID
movement. It is clearly interested in securing the safety of the traveling public and with
it, what financial viability the airline industry has left in the wake of the after-effects of
11 September and the resulting decline in travel, an economic recession and record fuel
prices. The paper examines the government push in this area and concerns over RFID and airline
passenger privacy. Finally, it examines an alternative vision of the future of airline customer service
customer service, which may preclude the need for baggage service as part of the air
passenger experience altogether.

What is radio frequency identification? 385

In brief, RFID uses a microchip in a tag or label to store data, which are transmitted
from or written to the tag or label when it is exposed to radio waves of the correct
frequency and with the correct communications protocols from an RFID reader. Tags
can be either active (using a battery to broadcast a locating signal) or passive (using
power from the RFID reader for location). A firm may use a combination of fixed and
hand-held readers for reading RFID tags to gain as complete a picture as has ever been
possible on exactly what is where in their operations. Reading and writing distances
range up to 100 feet and tags can be read at high speeds (Booth-Thomas, 2003). For a
detailed explanation of the technology, see McFarlane (2002), Kambil and Brooks
(2002) and Reed Special Supplement (2004).
The advantages of RFID over barcode technology are summarized in Table I.
RFID tags have been described as being a quantum leap over barcodes. A
professional magazine in the USA characterized RFID versus barcodes as “like going
from the telegraph to the Internet” (Valentine, 2003).
In an interview last year with the Harvard Business Review, the Group Chief
Executive Officer of Accenture’s Business Consulting Capability Group asserted that
interest in RFID is picking up significantly throughout the global business community
today. This is due not only to the fact that prices are rapidly dropping for both the
RFID tags themselves and for the readers to sense them. More importantly, the
technology is proving to provide significant improvements in operations and efficiency
over traditional methods, while affording companies the concomitant opportunity to
improve their security and customer service strategies (Kirby, 2003). From the
perspective of Deloitte (2004), if RFID is viewed as simply an alternative means of
identification and labeling to barcode technology, then businesses will have a “lost
opportunity” on their hands. This is because RFID technology offers the opportunity

Barcodes RFID tags

Barcodes require line of sight to be read
Barcodes can only be read individually
Barcodes cannot be read if they become
dirty or damaged
Barcodes must be visible to be logged
Barcodes can only identify the type of item
Barcode information cannot be updated
Barcodes must be manually tracked for item
identification, making human error an issue
RFID tags can be read or updated without
line of sight
Multiple RFID tags can be read
simultaneously
RFID tags are able to cope with harsh
and dirty environments
RFID tags are ultra thin, and they can
be read even when concealed within an item
RFID tags can identify a specific item
Electronic information can be over-written
repeatedly on RFID tags Table I.
RFID tags can be automatically tracked, RFID vs barcode
eliminating human error technology
MIP for transformative change in internal business processes, supply chain management
23,4 and customer service.

Baggage and airline customer service: the Delta Air Lines case
According to the recently released Airline Quality Rating 2004 report (Table II), Delta
Air Lines, based in Atlanta, has now fallen to last among the 12 major US airlines in
386 consumer perceptions of service quality. To put this in perspective, while the airline’s
composite quality rating has actually improved over time since 2000, in that same time
frame, Delta’s competition has been making marked improvements in the service
components that matter most to airline customers.
Today, Delta is embroiled in the turmoil characterizing the American airline
industry today. Facing rising fuel costs, a downturn in business travel, an uncertain
economy, and discount competition, all the established “legacy” carriers in the USA are
struggling financially and operationally today, with prominent carriers such as US
Airways and United barely surviving (Tully, 2004). Many in the industry think that the
current price-war among US carriers will result in an imminent shake-out, and the four
remaining legacy carriers are most vulnerable due to high cost structures and a
long-existing resistance to change (Carey and McCartney, 2004; Grow, 2005).
Delta itself has been the subject of bankruptcy rumors, and it has conducted lay-offs
and closed its major hub at the Dallas/Fort Worth International Airport to stave-off its
demise (Perez, 2004a). In September 2004, its CEO announced a comprehensive
overhaul plan, including laying-off thousands of employees, and secured initial
agreement from its pilots union to the recall of retired pilots on a limited basis (Fein,
2004; Weber, 2004). Delta was able to secure the approval of its pilots in November
2004 to cut their wages and benefits by one billion dollars a year over the next five
years (Perez, 2004b).
In the wake of 11 September, American Airlines are finding that without the ability
to raise fares or to spend lavishly to improve customer service, they must improve their
operational efficiencies and performance to survive. The Business Travel Coalition

Rank Airline AQR score

1 Jetblue Airways 20.64

2 Alaska Airlines 20.74
3 Southwest Airlines 20.89
4 America West Airlines 20.89
5 US Airways 20.96
6 Northwest Airlines 21.02
7 Continental Airlines 21.04
8 Airtran Airways 21.05
9 United Airlines 21.11
10 ATA Airlines 21.17
11 American Airlines 21.24
12 Delta Air Lines 21.24
13 American Eagle Airlines 22.10
14 Atlantic Southeast Airlines 25.76
Table II. Industry average 21.14
2004 airline quality
ratings Source: Bowen and Headley (2004)
issued a warning in October 2004 in which the group urged the US Congress “to RFID and airline
prepare for a ‘catastrophic failure’ in the airline industry within the next 12 months” customer service
due to “the likelihood that two or three major network airlines would be forced to
liquidate” (Hensel, 2004, p. D1).
One particular area of weakness for Delta has been its handling of air travelers’
checked-in luggage. As can be seen in Table III, Delta improved upon the industry
average rate of nine lost bags per 1,000 passengers. Delta’s overall performance is also 387
affected by that of Atlantic Southeast Airlines (ASA) and Comair, its regional partners
throughout much of the United States. ASA “earned” the lowest quality rating of all
airlines operating in the United States, regardless of size. Luggage service is a
particularly sore point, as ASA’s rate of 28.16 mishandled bags per 1,000 passengers is
over three times the industry average. Comair’s rate of 22.23 mishandled bags is more
than double the industry average, reflecting to some degree its problems during the
Christmas 2004 season.
Further baggage handling problems afflict Delta. According to the same
Department of Transportation report, Delta was ranked 12th out of 19 airlines in
terms of mishandled baggage reports per 1,000 passengers for the calendar year 2004,
with a rate of 5.17 reports versus the industry average of 4.91 for the year (US
Department of Transportation, 2005, p. 27). Delta’s mishandled baggage rate increased
from 3.57 in 2002 to 3.84 in 2003. Overall baggage complaints were up 233 percent in
December 2004 versus December 2003. The parent company, without its partners, had
the second highest number of baggage complaints in December 2004, surpassed only
by US Airways. Overall, complaints were up by 32 percent for the calendar year 2004
versus the previous calendar year (1,428 against 1,080). Delta suffered the third highest
number of complaints for the calendar year 2004, accounting for 15 percent of the
total for US airlines-only complaint figure, after American Airlines and US Airways.

Rank Airline Reports per 1,000 passengers

1 Hawaiian Airlines 2.58

2 Airtran Airways 3.23
3 Jetblue Airways 3.90
4 Alaska Airlines 4.28
5 Independence Air 4.87
6 Southwest Airlines 5.15
7 ATA Airlines 5.47
8 Continental Airlines 6.15
9 America West Airlines 6.23
10 United Airlines 6.43
11 American Airlines 7.59
12 Northwest Airlines 7.87
13 Expressjet Airlines 10.31
14 Delta Air Lines 12.69
15 American Eagle airlines 13.41
16 Skywest Airlines 16.50
17 US Airways 17.13
18 COMAIR 22.23 Table III.
19 Atlantic Southeast Airlines 28.16 Mishandled baggage
reports for US airlines,
Source: US Department of Transportation (2005) December 2004
MIP The 167 baggage complaints against the parent company on its own represented
23,4 24 percent of the 688 complaints of any kind lodged against the airline during
calendar year 2004, as compared to flight problems at 16 percent (US Department of
Transportation, 2005, pp. 33-34, 39-40).
Despite years of trying to improve the quality of its baggage-handling systems,
Delta has seen the performance of its current barcode-based system descend to a level
388 of performance in which bar-coded labels are successfully read by scanners only
85 percent of the time. According to a company spokesman, the airline faced the fact
that it had “reached the end of the improvements that could be accomplished without
new technology” (Rothfeder, 2004). Of course, incorrect scanning does not necessarily
mean that a bag will end up in Wichita Falls when its owner is heading for Wichita. In
the end, Delta estimates that only 0.7 percent of all checked luggage is actually “lost”.
However, the airline spends more than $100 million each year to return these bags to
their rightful owners and provide compensation to passengers whose luggage is never
found (Collins, 2004).
Delta’s top management has decided to tackle its “bag problem” head-on, looking to
RFID technology as the means to end of providing far-better luggage service to its
passengers, with efficiency improvements of upwards of 60 percent being predicted by
analysts (Siddiqi, 2005). In the fall of 2003, they implemented a pilot test of an RFID
tracking system for checked luggage on flights between a major airport in Florida and
the hub in Atlanta. In this testing program, Delta tracked 40,000 passenger bags
equipped with radio frequency identification (RFID) tags from check-in to loading on
an aircraft. As can be seen in Table IV, the RFID-enabled system provided far superior
reading accuracy than the legacy barcode-based system. In the spring of 2004, Delta
implemented another pilot RFID baggage-tracking system in Cincinnati, producing
similar results (Murray, 2004).
Through the two test programs, Delta learned several valuable lessons. It saw that
tag antennas could be damaged by the static electricity generated along the conveyor
systems (Collins, 2004). It also found that the lowest scanner accuracy rate
(96.7 percent) was found when attempting to scan bags inside the unit load devices
(ULDs), the large containers pre-loaded with checked luggage that are then loaded onto
the plane. The ULDs are made of metal with canvas doors, and the metal housing
impeded the radio signals. Delta plans to coat the ULDs with a material that can better
reflect the radio waves (Brewin, 2004a). While the test programs were conducted in
neutral weather conditions, concerns were raised over the ability of the tagging
systems to function in harsher environments, such as at Delta’s western hub in Salt
Lake City (Murray, 2004). Finally, there is a famous American television commercial
for the Samsonite brand, which shows a gorilla in his cage, tossing the bag around and
eventually stamping on the suitcase. The obvious message is that checked bags are
not always handled “delicately” by the humans or the machinery they pass through

Errors per 40,000 bags RFID Barcode

Table IV. Worst case 1,320 (96.7 percent) 8,000 (80.0 percent)
Results from Delta Best case 80 (99.8 percent) 6,000 (85.0 percent)
Airlines pilot RFID test in
Jacksonville Source: AIM Global (2004)
baggage systems. Thus, it must be noted that baggage handling itself can damage or RFID and airline
detach labels/tags, and concerns over the durability of the RFID-tag are genuine. customer service
Even with limited capital to invest in IT projects, in July 2004, Delta became the first
airline to commit to having RFID-enabled baggage tracking in place system wide by
2007. Delta plans to use passive tags, which will cost 25 cents each initially. However, it
hopes that the cost of the tags will drop to approximately 5 cents a unit by the time the
system is fully implemented in 2007 (McDougall, 2004). Delta estimates that the full 389
implementation cost of its RFID-based tracking system will ultimately fall somewhere
between $15 and $25 million for its 81 airport locations. It has not yet announced plans
for deploying the RFID-based system with its code-sharing partners, which would
greatly raise the number of airports worldwide for implementation and the cost and
complexity of the overall project (Murray, 2004). While this represents a significant
investment, the ROI equation shows that this cost can be recouped in far less than a
single year. This makes Delta unique, as it is one of the few examples to date in any
industry where the decision to invest heavily in automatic identification technology is
based on the desire to dramatically improve customer service.
Delta’s RFID-enabled baggage system will give the company the ability to track a
bag from the time a passenger checks it in at the departure airport till the time the bag
is claimed at the baggage carousel at the arrival airport. At check-in, the RFID tag’s
serial number will be associated with the passenger’s itinerary. Delta will position
fixed readers at check-in counters and on conveyor belts where the bags are sorted.
The airline will also equip baggage handlers with portable readers and outfit aircraft
cargo holds with built-in readers. These can also be positioned to scan bags as they are
loaded and unloaded from the unit ULD containers that are loaded into the hold.
Through this surveillance system, Delta should be able to all but eliminate the problem
of misloaded and misdirected checked luggage, and the attendant costs of reuniting the
lost bag with the passenger. Ramp and flight crews will be able to make certain that
the right luggage is on board before an aircraft takes off. In the event that a passenger’s
bag is misdirected, Delta can instantly locate the bag through its RFID reader and more
quickly route it to the passenger’s destination. A bag systems manager for the
company illustrated the fact that RFID will allow the airline to take proactive customer
service steps on baggage problems by observing that “with this technology, we won’t
have to wait for the customer to come tell us that the bag is lost. We can tell the
customer it’s on the wrong plane and start responding before it’s a crisis. Eventually,
RFID should be able to signal an arriving passenger’s cell phone with news of how
long it will be before the bag is on the carousel” (Field, 2004, p. 61).
Delta’s Director of Airport Strategy, recently commented in Airline Business that
RFID tracking: “will transform the airline on the ramp as much as radar did to
transform air traffic control. When that happened, it was as if a light was turned on
and people said, oh, so that’s where the planes are. This technology will do that for
bags. People will say, oh, so that’s where the bags are” (Field, 2004, p. 60). Delta’s
ultimate goal is to have a baggage tracking system that will have a “zero mishandling
rate” (Brewin, 2004a).

Conclusions
In a widely read article in Scientific American, Want (2004) predicted that airline
baggage tracking would be one of the first commercially viable RFID applications.
MIP The potential market size is outstanding, as the world’s airlines currently handle
23,4 approximately two billion checked bags annually (Anon., 2003). In the view of AIM
Global (2004), with the proven accuracy and effectiveness of RFID-enabled baggage
tracking, it may just be a matter of time before the American Transportation Security
Administration (TSA) mandates that such automatic identification technology-based
systems be employed in the US. However, such mandates, whether in the US alone or in
390 conjunction with other civil aviation authorities worldwide, would raise a multitude of
issues. These include who will bear the costs of such systems, the need for standards,
and the need for international airlines that fly to the US and/or interconnect with the
US-based carriers to employ such RFID tagging.
The Chief Information Officer of British Airways believes that it is important for the
airline industry to work collaboratively to ensure that investments in automatic
identification technologies RFID will yield the fullest possible returns on investment
and customer service benefits. He has suggested that IATA should play a leading role
in driving this technology, so as to ensure that the industry adopts common standards,
commenting that “for technology to fully bring business change, the whole industry
needs to move forward” (Thomas, 2004). In June 2004, Delta and United jointly
proposed an RFID specification for baggage to the IATA (Collins, 2004). IATA also
announced a four-point plan during its June 2004 Singapore meeting to tackle the
industry’s cost problem through the use of technology. The plan includes a paperless
ticket system by 2007, industry standards for all self-service check-in terminals,
barcodes on boarding passes to allow printing at home, and RFID baggage tags
(Arnfield, 2004).
The need for a unique air transport standard in the not-so-distant future is
obvious, looking to the day when luggage will contain items which carry their
own RFID tags, as RFID becomes a “killer-app” (for “application”) in retailing
(Collins, 2004). It is even more important when one considers that the aircraft itself
is likely to have key parts tagged with RFID sensors in the near future. Boeing
and Airbus are taking the lead in outfitting the new 787 and A380 with
RFID-tagged parts to provide a new level of historical and performance data
relating to key components. These two dominant commercial aircraft
manufacturers are cooperatively working to produce industry standards, which
is especially important since they share 70 percent of their supplier base
(Tegtmeier, 2004). Likewise, Federal Express and Delta have pilot tested equipping
both flight deck electronics and engine parts with RFID sensors (Brewin, 2004a).
Thus, in only a matter of a few years, commercial airliners will be perhaps one of
the most concentrated locations for RFID tags, making standards a necessity for
avoiding problems with signal collision and information overload.
On a final note, moving to RFID may be the only way airlines can even continue to
handle checked luggage in the future. In fact, the Irish low-fare carrier, Ryanair, has
announced its eventual intention to stop providing the service altogether. Its
controversial CEO believes that, by banning checked luggage, the cost of flying each
passenger could be cut by at least 15 percent. This would be due to the elimination of
the staff needed at check-in counters and in baggage handling operations. Not only
would there be a direct cost savings for Ryanair, but there is the very real prospect for
improved service, as passengers would get through the airport much faster and that
their aircraft could be utilized more productively. The latter would be due to the
quicker turnarounds that the airline could achieve by not having to load outbound and RFID and airline
unload inbound aircraft luggage holds (Noakes, 2004). customer service
Over the next few years, Ryanair has planned to take steps to modify its passengers’
mindsets regarding their baggage to encourage them to carry more of their baggage
with them on board. The airline has already raised the weight limits for carry-on bags,
while hiking its fees (up 17 percent) for overweight checked luggage. It even intends to
start awarding passengers a small rebate if they choose to not check a bag, during 391
2005. While the competition scoffs at this plan, the CEO notes that other innovations in
the airline industry, including the elimination of paper tickets and web-based travel
booking, drew similar derision when they were first introduced (Noakes, 2004; Johnson
and Michaels, 2004).
While the Ryanair gambit may prove to be prescient, for the near term, passenger
luggage service will continue to be a cost of doing business for airlines. The Montreal
Convention on airline standards met in the summer of 2004 and “set new compensation
rates for bag loss, tripling the maximum amount to £803 per case. Factor in the
steadily falling costs of RFID and the airlines’ need to win new friends and it’s likely
that, in three or four years, RFID will be the global standard” (Siddiqi, 2005). An
industry analyst has predicted that RFID-based baggage tracking will become
standard throughout the airline industry over the next decade (Brewin, 2004c). In the
end, the world’s fleet of commercial airliners may well become the most RFID-equipped
vehicles on earth.
Indeed, tracking luggage with RFID may not be the only automatic identification
technology we will see in use at the airport in the near future. By 2015, the International
Civil Aviation Organization (ICAO) has proposed putting RFID chips in the over a
billion passports worldwide. This move, while drawing fire from civil rights groups
around the globe, may become a reality, all in an effort for the airlines and civil
authorities to have better insights into who – and what – exactly to let on their aircraft
(Jones, 2004). There are concerns, however, as to how this data will be utilized in airport
security. From a practical standpoint, critics have scoffed at the jumble of data that
would be created by trying to track thousands of passengers simultaneously in an
airport. Privacy advocates also object to the invasiveness of the tracking, leading one
to ask, “Are they going to track how long I spend in the ladies’ room?” (Brewin, 2004b).
The authors believe that it is essential for airlines to look to move toward
RFID-enabled baggage tracking systems as a means of closing the service expectation
delivery gap. They must invest not only in the luggage tracking systems themselves,
but in the data management systems and employee training efforts that will make
RFID baggage tracking actionable, real-time business intelligence to improve customer
service.

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Further reading
394 US Department of Transportation (2004), Air Travel Consumer Report – August 2004, Office of
Aviation Enforcement and Proceedings, Aviation Consumer Protection Division, available
at: http://airconsumer.ost.dot.gov/reports/2004/0408atcr.doc