TABLE OF CONTENTS(Click on Section)

PURPOSE

BACKGROUND

CHAIRMAN'S OPENING STATEMENT

WITNESSES

The purpose of this hearing is to examine issues related to lost, delayed, damaged, or pilfered baggage, and potential solutions to those problems.

In the United States, baggage handling systems are typically owned and operated by the airlines, rather than the airport. The situation varies from airport to airport and from airline to airline. Some airlines have their own baggage system, some share baggage systems with other airlines, and some hire third party companies to provide a baggage system. Elsewhere in the world, airports typically lease baggage handling systems that are then used by all airlines operating at the airport.

It is difficult to obtain exact information on the total number of checked bags, and how many of those bags are mishandled. SITA¹ , a cooperative venture owned by the airline industry, estimates that 3 billion bags were checked worldwide in 2005, and approximately one percent (30 million) of those bags were mishandled. According to data reported to the U.S. Department of Transportation, approximately 3.6 million bags were mishandled in the United States in 2005.

Prior to 9/11, the screening and handling of baggage in the United States was the responsibility of the airlines. Since the Transportation Security Administration (TSA) began operations in 2002, however, checked baggage has been handled first by TSA and then the airline, making it more difficult to determine who is responsible for mishandled bags.

Currently, most airline baggage handling systems use a barcode, located on the baggage tag, to identify and track each bag. The barcode is read by optical scanners as the bag travels through the baggage handling system. An industry-wide standard ensures that the barcodes are interoperable from airline to airline, which is important when a passenger travels on multiple carriers during a single trip (i.e., interlining). TSA does not use these barcodes to track bags through the screening process.

Domestic Data on Mishandled Baggage

Each U.S. airline that accounts for at least one percent of domestic passenger revenue is required to report data on mishandled baggage to the Department of Transportation (DOT) on a monthly basis. Currently, 19 carriers report data. These data are based on the total number of reports each carrier received from passengers concerning lost, damaged, delayed or pilfered baggage. According to DOT, when a customer informs a carrier of a baggage problem, the carrier must prepare a mishandled baggage report, which is then included in the statistics reported to DOT. A single mishandled baggage report does not necessarily equate to a single mishandled bag or single passenger. For example, one baggage report could cover multiple bags.

DOT data suggests that mishandled baggage rates increased by 23 percent from 2004 to 2005 (from 4.91 mishandled baggage reports per 1,000 domestic passengers in 2004 to 6.04 per 1,000 domestic passengers in 2005). Despite this recent upward trend, the current rate of mishandled baggage is only slightly worse than it was in 2000 (5.29 reports per 1,000 passengers), the last peak travel year before 9/11. In addition, the current rate is far better than it was in 1988, the first full year that the mishandled baggage reporting rule was in effect.

DOT does not require carriers to report the type of mishandling that occurred (i.e., whether a bag was lost, delayed, damaged, or pilfered). However, DOT believes that the vast majority of reports relate to delayed bags and only a very small percentage of bags end up being lost. The next largest group after delayed would likely be damaged, followed by stolen items.

Worldwide Data on Delayed Baggage and Its Causes

In the late 1980's, SITA, together with the International Air Transport Association (IATA), developed a system for tracing lost and mishandled baggage, known as WorldTracer. WorldTracer is now used by 391 airlines (including U.S. ATA members) and ground-handling companies worldwide, providing a single inventory of unclaimed baggage.

WorldTracer operates like a "lost and found" for baggage. It is a repository to which an airline that finds a bag sends a message, and an airline that is looking for a bag sends a message. WorldTracer uses an algorithm to match, based on external and internal baggage characteristics, the "lost" bag messages with the "found" bag messages.

Using WorldTracer's worldwide lost-baggage inventory, SITA has determined the causes of delayed baggage in 2005 as follows:

Transfer Baggage Mishandling

Nearly two-thirds of all baggage delays (61 percent) are caused by transfer baggage mishandling. It takes longer for bags to reach a connecting flight than for passengers to reach that same flight. In recognition of this, ATA and IATA establish minimum connecting times for each individual airport, largely based on the time needed to transfer baggage. However, flight delays -- caused by severe weather, air carrier maintenance or crew problems, air traffic control problems, or security delays -- can reduce the actual time available to make a connection, resulting in delayed baggage.

Failure to Load at Originating Airport

The second most common cause of baggage delays (15 percent) is a failure to load the bag at the originating airport. This can occur when a passenger checks in late, or there is a last-minute gate change. It can also occur if the barcode on the baggage tag is not read properly when the bag is being sorted. When this happens, the bag is automatically sent to a default area, where the baggage tag has to be read manually.

Ticketing Error/ Bag Switch/ Security/ Other

This category represents nine percent of delays. "Ticketing error" occurs when the wrong flight number is recorded on a ticket, and therefore the baggage tag. This is less of a problem now than it used to be due to the increased use of automated systems. "Bag switch" occurs when a ticketing agent places one passenger's baggage tag on another passenger's bag. Baggage delays caused by security are also included in this category. For example, a back-up in security screening at the originating airport can result in a bag missing its flight. According to SITA, a failure to load due to security delays would be reported in this category, rather than the more general "failure to load" category.

Loading/ Offloading Error

This category represents just four percent of delays. Examples of loading errors include a bag that is put on the wrong airplane, or a bag that is put in the wrong area of an airplane, resulting in it not being off-loaded correctly at the transfer airport. Examples of offloading errors include a bag that is not transported to the baggage claim area in a timely manner once it arrives at the destination airport, or a bag that is inadvertently mixed in with connecting bags at its destination airport.

Other Causes of Baggage Delay

Space-weight restriction delays (representing five percent of all delays) occur when there is not enough room on-board a particular aircraft for all baggage. Arrival station mishandling (causing three percent of delays) is similar to "offloading errors," discussed above. Tagging errors (also causing three percent of delays) occur when a tag with a damaged barcode is placed on a bag, or the wrong information is placed on a baggage tag. Again, this is less of an issue today, with the use of automated systems.

Average Time a Bag is Delayed

According to SITA, the WorldTracer inventory shows that the average delayed baggage file is open for 1.3 days, or 31.2 hours, from the time the bag is entered in WorldTracer to when it is found and restored to its owner. It should be noted that the time the customer files a lost baggage claim and the time the claim is entered in WorldTracer are not necessarily the same. In its February 2001 Final Report on Airline Customer Service Commitment, the DOT Office of Inspector General (OIG) stated that it found instances where customers' claims were not entered into WorldTracer until several hours after the customers' claims had been filed at the baggage claim office.

TSA's Role

Delayed Bags -- According to TSA, it works with the airlines to align TSA screener staffing levels with airline schedules. However, airline schedules tend to have flights departing in banks at certain preferred times of the day. This may, during unusually heavy peak load periods, cause a surge in passengers and baggage that exceeds TSA's screening capacity for short periods of time. Where it is possible, TSA prioritizes the baggage in order to screen bags with immediate departure times first.

Pilfered/Damaged Bags -- In addition to playing a role in some baggage delays, security screening can also contribute to damaged or pilfered baggage. Claims allegedly resulting from incidents that occur at a passenger screening checkpoint (about 15 percent of all claims received by TSA) are handled exclusively by TSA. However, claims related to checked baggage (about 85 percent of claims received by TSA) could be the fault of either TSA, the air carrier, or other third parties. Therefore, a passenger whose checked baggage has been damaged or pilfered must file two claims, one with TSA and one with the airline. Claims filed with TSA are resolved in accordance with the Federal Tort Claims Act (FTCA), while claims filed with an air carrier are resolved in accordance with that carrier's "Contract of Carriage."

When TSA receives a claim, it is assigned to a claims examiner. The examiner does all the research and makes a recommendation on the claim. Then a TSA Delegated Authority Official reviews the claim and the research provided and either approves or denies the claim.

It is often difficult to tell whether TSA or the airline is to blame for damaged or stolen items. If TSA is unable to determine whether TSA or the airline is at fault, TSA usually pays half of the amount claimed. TSA pays some amount of compensation on approximately 47 percent of claims received. In FY 2005, TSA paid $2.3 million to settle claims.

If the preponderance of the evidence shows that the airline or the passenger was at fault, TSA denies the claim. Under the FTCA, there is a redress procedure under which the passenger can request reconsideration of a denied claim. Approximately 30 percent of denied claims request reconsideration. When that happens, the claim goes to a different Delegated Authority Official at TSA for review and reconsideration.

The number of claims filed with TSA has declined. From 2002 through 2005, approximately 2,000 baggage claims were filed each month. Currently, about 1,700 baggage claims are filed per month. TSA attributes this in part to better education of travelers about not packing valuable or fragile items in checked baggage.

DOT's Role

DOT's Office of the Assistant General Counsel for Aviation Enforcement and Proceedings (the Office) is responsible for enforcing air travel consumer protection requirements. Recently, over 500 aviation consumer complaints have been filed with DOT each month. The most common types of complaints received are about flight problems (cancellations, delays, misconnections) and baggage problems. In its February 2001 Final Report on Airline Customer Service Commitment, the DOT OIG stated that the oversight and enforcement expectations for this Office significantly exceed its capacity to handle the workload in a responsive manner. At that time, the Office had about 16 employees. Subsequently, the Office received funding for additional staff, as well as additional responsibilities (in particular, the responsibility to investigate each of the approximately 500 disability-related complaints it receives each year). By 2003-2004, the Office had about 40 employees. The staffing has since declined to about 33-34 employees, due to funding constraints.

Radio Frequency Identification (RFID)

RFID technology is often cited as one possible way to improve baggage handling. According to IATA, RFID will help reduce the number of mishandled bags and, upon full implementation, save the aviation industry an estimated $760 million per year, worldwide.

RFID is a technology incorporated into a silicon chip that emits a radio signal which matches a user-defined serial number with an item, in this case a piece of baggage. The serial number contained on the chip is known as the baggage license plate and has been printed on the baggage label as a barcode for many years. The number can be read at a distance by an antenna. A number of items can be read simultaneously. It is also possible to "write" and "talk" to a single tag, allowing the status of an item to be updated as it is processed. According to IATA, these characteristics enable bags to be sorted and loaded faster than current bar code systems and reduce the number of mishandled bags and associated costs.

In November 2005, IATA introduced a global standard for RFID baggage tags that should facilitate more widespread use of RFID for baggage management by airports and airlines. However, the cost of RFID appears to be a concern among airlines and airports.