Mishandled baggage rates fell by 23% in 2025, with total volumes falling 19% to 24 million bags, according to SITA’s 2026 Baggage IT Insights report.
However, despite handling rates falling below pre-pandemic levels for the first time as passenger numbers rise, the total cost to the industry was approximatlely US$6.3bn – equal to 15% of total airline industry profit.
With each bag carrying an average cost of US$260 and net profit averaging just US$8 per passenger, one mishandled bag wipes out the profit for more than 30 seats sold, and five erases the profit of an entire flight.
SITA attributes the fall in mishandling rates to global digital transformation efforts, with a shift in how systems such as real-time data sharing, AI routing, biometric bag drop and connected passenger devices connect.
“Baggage is shifting from a logistical problem to a digital service,” said Nicole Hogg, portfolio director baggage, SITA. “Passengers expect to know where their bag is at every moment, and they’re 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. That’s how the industry earns the trust passengers now expect.”
The results of this collaboration between passengers and operators has reaped rewards. According to SITA, Apple’s Find My integration with SITA WorldTracer cut permanently lost luggage by 90% in its first year and shortened delayed-bag recovery by 26%. SITA also recently integrated Google’s Find Hub share item location feature into WorldTracer. Thai Airways, using SITA’s Auto Reflight, compressed a three-minute task to a single second per bag across nine airports.
David Lavorel, CEO at SITA, said, “Airports are operating closer to their physical limits every year, and the answer isn’t always more concrete. Data, AI and predictive operations let us get more out of the airport we already have, at check-in, security, the gate, on the apron and in baggage halls. Baggage shows the formula works. Solutions such as Total Airport Management take the same approach across the whole lifecycle, so airports can absorb growth without expanding their footprint.”
The report points to where the next gains can come from. Delayed bags account for around 70% of the total cost, most of it operational, in recovery, rerouting and delivery. For lost or damaged bags, up to 70% of the cost is compensation. Transfers remain the core mishandling driver at 39% of cases in 2025, down from 41% the year before.
Three in four airlines plan to invest in AI over the next two years. Half plan to give passengers real-time baggage updates. Industry-wide baggage tracking under IATA Resolution 753 has now passed the 50% mark, with full compliance targeted for 2027.
The SITA 2026 Baggage IT Insights report is available at SITA Baggage IT Insights.
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