Why airlines loose thousands customers every year
What does an airline customer on family vacation feel when the bag with summer clothes doesn’t arrive at the destination? What does the customer think when his or her suitcase with business attire is delayed until after the meeting? Likely, customers will be disappointed and may book another airline next time.
According to the SITA report, the airline industry reported 23.1 million mishandled bags in 2015, which resulted in a total cost for the industry of $2.3 billion. The report also indicates that the average baggage mishandling rate is 6.5 bags per a thousand. The mishandled bag rate (MBR), that includes bags that are lost, delayed, damaged, or stolen, has not dramatically changed over the past years.
Delta Air Lines has one of the airline industry’s best luggage handling records — just 2 out of every 1,000 bags failed to arrive on time. Nevertheless, in 2015 Delta reported the total number of mishandled bags to be approximately 245,000. By applying an average cost for the airline of $100 for each bag that was delayed, damaged or lost, the direct financial impact can be estimated at $25 million.
Delta is the first airline in the US to invest $50 million in deploying Radio Frequency Identification — or RFID — baggage tracking technology to solve one of air travel’s biggest headaches: lost and delayed luggage. Today, RFID technology provides a 100% automated and a very accurate baggage tracking against reasonable costs. The airline industry consensus is that the MBR can be improved by at least 30% after putting a RFID baggage tracking system into operation.
Along with lost bags, airlines can lose their reputation and their passengers. It is a generally known fact that unsatisfied customers will share their negative experience with 20-25 people. And that is a statistic pre-social media!
Longest Chance, in collaboration with IATA, has developed the Hand to Hand RFID Baggage Tracking System especially for improving the airline baggage performance. The Longest Chance common-use system does not require an investment or maintenance by the airline and provides a 99.99% read rate.
RFID has opened new opportunities for airlines to significantly improve their baggage operations and to provide new services for customers, such as baggage status updates and baggage location notifications. Airlines are now able to better retain customers as opposed to losing them for good after losing a summer outfit or a business attire.