At an internal meeting on Friday, American Airlines President Robert Isom told employees “every lost bag is nearly $60.” That amount was new to me.
In January alone American mishandled 74,975 bags, the most in the industry by far, and not any improvement over the prior year. At $60 per bag it cost American $4.5 million, and annualized at the same rate $54 million. Extrapolating similar costs for the industry would mean US carriers losing over $160 million a year to mishandled bags.
It would be even costlier to airlines if they were forced to refund checked bag fees when losing a customer’s luggage, something that’s only required for Canadian passengers.
It makes sense to invest to reduce these costs.
- Sometimes lost items can be recovered, like when an American employee listed a passenger’s clothing on Facebook marketplace or when a TSA employee look a camera and forgot to remove the CNN stickers before listing it on eBay.
- The high costs are likely why Delta worked to leverage the gig economy to deliver lost bags.
- It’s no surprise to see this Japan Airlines employee at London Heathrow making sure every bag is laid symmetrically on the belt at baggage claim.
Japan airlines value perfection. 🇯🇵 And so do we. Isn't this the neatest baggage belt you've ever seen? 🛄 https://t.co/I8ZYHJO5cU pic.twitter.com/SwtDMTav7L
— Heathrow Airport (@HeathrowAirport) September 25, 2019
In the U.S. however there are only two kinds of luggage: carry on and lost. Two years ago an American Airlines baggage handler fell asleep in the cargo hold and flew to Chicago.
This, however, is how to get it right:
[…] The month before the pandemic American Airlines lost 75,000 checked bags. Incoming CEO Robert Isom told an internal group of American employees just after that that “every lost bag is nearly $60.” […]