THE worldwide aviation sector still loses an estimated $6.3 billion annually due to improperly managed luggage, despite notable advancements in baggage handling brought about by digital technology, according to the 2026 SITA Baggage IT Insights Report released on July 6.
The report indicated a 23% decrease in mishandled baggage rates in 2025, marking the largest improvement since the COVID-19 recovery, alongside a rise in global passenger traffic to five billion.
During the year, around 24 million bags were mishandled, resulting in an average cost of $260 per incident for airlines, as reported by SITA.
According to the report, with the industry’s average net profit at only $8 per passenger, one mishandled bag can erase the profit from over 30 passengers, and five such incidents can negate the profit from an entire flight.
The report noted that passenger volumes were exceeding airport infrastructure growth, but advanced digital technologies were beginning to improve baggage operations.
In 2025, innovations such as real-time data sharing, AI-powered baggage routing, biometric systems, and connected passenger devices significantly enhanced the aviation industry’s performance.
SITA’s Portfolio Director Nicole Hogg emphasized that baggage management is evolving into a digital service, reflecting passengers’ desires for constant updates on their luggage.
The integration of Apple’s Find My feature with SITA WorldTracer led to a 90% reduction in permanently lost baggage and a 26% decrease in recovery times.
Additionally, Thai Airways’ use of SITA’s Auto Reflight solution reduced baggage rebooking times from three minutes to one second.
SITA’s CEO David Lavorel noted that future industry growth hinges on intelligent technology, despite transfer baggage continuing to be the primary cause of mishandling at 39% in 2025, down from 41% the previous year.