Airlines eye up RFID tagging

European airlines could begin tagging hold luggage with new hi-tech radio-frequency trackers, in response to rising costs incurred from compensation claims for lost bags.

Airlines are paying out more in compensation claims than ever before following the introduction of new EU rules in February.

The new legislation means the maximum compensation claim for lost or damaged luggage has trebled to €1,200 (£814), costing the industry close to €1 billion (£678 billion) a year.

Experts believe the rising costs will force airlines to consider introducing radio-frequency identification technology (RFID) tags to help locate lost luggage.

"The new compensation rules may be an incentive for EU airlines to have a closer look at RFID tags," an analyst at consulting firm Frost & Sullivan told MarketWatch.

RFID tags could solve the current issues surrounding printed bar codes, which only have an accuracy of 80 per cent and can easily get lost or crumpled.

Such tags have already proved popular with retailers but the technology costs around five times as much as traditional printed tags.

But with European airlines currently losing almost 12 bags per 1,000 passengers – with BA and KLM among the worst offenders – any system enabling carriers to reduce lost luggage could pay handsome dividends.

© Adfero Ltd