With net profit averaging just $8 per passenger, one mishandled bag erases the profit from more than 30 seats sold, while five can wipe out the profit of an entire flight, according to the latest report by aviation IT leader SITA.
In 2025, mishandled baggage rates dropped 23 per cent, a sign that digital transformation efforts are taking hold, according to the 20th edition of SITA’s 2026 Baggage IT Insights report.
However, the report by the aviation IT leader adds that mishandling still costs the industry a whopping $6.3 billion annually. Each bag carries an average cost of $260. With net profit averaging just $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.
The challenge is further compounded by passenger volumes 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.
The report notes that improvement is not only technology‑driven but also supported by how systems connect through real‑time data sharing, AI routing, biometric bag drop, and connected passenger devices.
Nicole Hogg, Portfolio Director Baggage, SITA, stated that baggage handling is shifting from a logistical problem to a digital service. “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.”
Real‑world results show the formula at work. Apple’s Find My integration with SITA WorldTracer cut permanently lost luggage by 90 per cent in its first year and shortened delayed‑bag recovery by 26 per cent. SITA World Tracer is the global baggage tracking and tracing system used by airlines and airports to locate, route, and deliver mishandled bags.
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.
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David Lavorel, CEO at SITA, observed that with airports operating closer to their physical limits every year, 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 per cent of the total cost, most of it operational, in recovery, rerouting and delivery. For lost or damaged bags, up to 70 per cent of the cost is compensation. Transfers remain the core mishandling driver at 39 per cent of cases in 2025, down from 41 per cent the year before.
SITA said that three in four airlines plan to invest in AI over the next two years, while half plan to give passengers real‑time baggage updates. Industry‑wide baggage tracking under IATA Resolution 753 has now passed the 50 per cent mark, with full compliance targeted for 2027.