Mishandled bag rates drops by 23% in 2025; still costs USD 6.3 Bn a year: SITA
SITA baggage report representative image
Three in four airlines reportedly 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.
In 2025, the industry has reportedly made its strongest progress outside the pandemic, even as passenger numbers rise. Mishandled baggage rates dropped 23%, a sign that digital transformation efforts are taking hold, according to the SITA 2026 Baggage IT Insights report, the 20th annual edition.
But the bigger story is not just improvement. It’s the gap that remains. Mishandling still costs the industry USD 6.3 billion annually. Each bag carries an average cost of USD 260. With net profit averaging just USD 8 per passenger, one mishandled bag wipes out the profit from more than 30 seats sold, and five erase the profit of an entire flight.
Passenger volumes are rising faster than the infrastructure designed to handle them. In 2025 alone, 5 billion passengers travelled globally, yet 24 million bags were still mishandled. Across the longer term, mishandling has fallen by close to three-quarters since 2007.
What changed in 2025 was said to be not one technology but a shift in how systems connect: real-time data sharing, AI routing, biometric bag drop, and connected passenger devices.
“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.”
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 pinpoints 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 reportedly 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.
