APPROVAL SHEET

Title of Thesis: AN ECONOMIC ANALYSIS OF AIRPORT BAGGAGE

ROUTING AND AIRLINE SECURITY

Name of Candidate: Johny Leonard Sozi

Master of Science, 2011

Thesis and Abstract Approved: _____________________________

Dr Zhiling Guo

Assistant Professor

Information Systems Department

Date Approved: ________________

 Curriculum Vitae

Name: Johny Leonard Sozi

Degree and date to be conferred: Master of Science, 2011

Collegiate institutions attended:

MS. - University of Maryland Baltimore County (UMBC) May 2011

Major: Information Systems

BS - American Intercontinental University (AIU) Feb. 2007

Position held and Employer:

Baggage Service Supervisor (AA- BSO)

G2 Secure Staff / American Airlines at DCA 2007 - Present

 ABSTRACT

Title of Document: AN ECONOMIC ANALYSIS OF AIRPORT

BAGGAGE ROUTING AND AIRLINE
SECURITY

Johny Leonard Sozi, MS., 2011

Directed By: Assistant Professor, Dr Zhiling Guo

Information Systems Department

A significant portion of American Airlines (AA) and American Eagle (AE)

financial loss experienced at Washington Reagan National Airport (DCA) in the past

years is due to the inefficiency in baggage handling, routing processes and associated

security costs at DCA. The objective of this thesis is to analyze the impact of

Information Technology (IT) on airport baggage routing and security. Based on an

economic analysis of the detailed AA and AE daily baggage traffic flows and

baggage routing process data we collected at DCA, we not only identified several

areas of operational inefficiency in the baggage handling process, but also quantified

the benefit of IT investment in improving the process efficiency. These findings

provide important insights into major areas of inefficiency and technology investment

in the baggage handling operations by American Airlines. We also generalize our

findings to make applicable suggestions and practical recommendations on baggage

issues for the aviation industry.

AN ECONOMIC ANALYSIS OF AIRPORT BAGGAGE ROUTING AND

AIRLINE SECURITY

By

Johny Leonard Sozi

Thesis submitted to the Faculty of the Graduate School of the

University of Maryland, Baltimore County, in partial fulfillment
of the requirements for the degree of
Master of Sciences in
Information Systems
2011
 UMI Number: 1497447

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UMI 1497447
Copyright 2011 by ProQuest LLC.
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 Copyright by
Johny Leonard Sozi
2011
 Dedication

To my wife Rose Ssozi, children, Prim, Tendo, Franklin and Ivan,

Cousin Theresa Nassozi, and my co-workers at G2-American Airlines Washington

DCA.

ii
 Acknowledgements

I have no words to adequately express my deepest appreciation for my advisor,

Dr Zhiling Guo for all the guidance and support that she has given me generously

during my study. This Thesis would not have been possible without her. As a tribute

to her, I will give the same help and support to my future students given

opportunities. I am very grateful to the distinguished members of my thesis

committee, Dr Victoria Yoon and Dr Lina Zhou for the comments and suggestions

that helped me enhance the quality of my work.

My special thanks go to Mr. Gino Agostini and Mr Thomas, Lee for the

resourceful information they gave me from the American Airlines Baggage Service

Department at DCA. I cant forget acknowledging these organizations for their

resourceful information: TSA, DHS, RITA, BTS, GAO, and DOT. I wish to thank my

best friends Mr. Michel Tinguiri (PhD Candidate), Mrs. Assetou Barry, Nitin and

Anshuman for their valuable and on-going help they gave me. Their friendship made

me feel very comfortable and meant a great deal to me.

Above all, I owe a great debt of gratitude to my late father Josephat Galabuzi

and my mother Eriv Nakasi, for raising me up and my cousin sister Theresa Nassozi

for her care, love and support in my entire life. I would like to thank my wife Rose

and my children Tendo, Franklin, Prim and Ivan for the care, love, sympathy and

patience you have displayed to me during these years. The fun we have been getting

together makes me feel a proud father!

iii
 Table of Contents

Dedication ii
Acknowledgements iii
Table of Contents iv
List of Tables vi
List of Figures vii
Chapter 1: INTRODUCTION....... 1
Chapter 2: AN OVERVIEW OF AIR TRANSPORTATION INDUSTRY..............7
2.1: Airline Operations and Air transportation Competition ................................... 9
2.1.1: Airlines Focus on Baggage Handling Improvements .............................. 12
2.1.2: Equipping Airport with Newer Baggage Handling Facilities .................. 12
2.2: Operational View of Baggage Routing in Transportation ............................. 15
2.2.1: Air Trip Duration Effects on Baggage Handling ..................................... 15
2.3: Economic and Political Implications of Airport Security ............................... 16
2.3.1: Airport Influence on Airlines Business ................................................... 17
2.3.2: The ATSA of 2001 impact on the Airport Security................................. 17
Chapter 3: AA BAGGAGE HANDLING AND SECURITY MEASURES...22
3.1: American Airlines Operations at DCA ........................................................... 22
3.1.1: AA Baggage Physical Flow Chart ........................................................... 23
3.1.2: Physical Baggage Flow at TSA Check-Point .......................................... 23
3.1.3: Physical Flow in the AA and AE Bag-Room Unit .................................. 27
3.1.4: Physical Baggage Flow in AA and AE Baggage Service Office.29
3.2: An Operational ProcessView of Baggage Routing at DCA ........................... 32
3.2.1: The Current Tracking Technology at DCA ............................................. 37
3.2.2: AA and AE Data Flow ............................................................................. 38
3.3: AA Baggage Policies and the Role of Baggage Service Office .................... 47
3.3.1: AA and AE Baggage Policy and Procedures ........................................... 48
3.3.2: Handling Baggage Claims for Passengers ............................................... 49
3.4: Transportation Security Administration Baggage Policies and Procedures ... 50
3.4.1: TSA Security Requirements and Programs ............................................. 51
Chapter 4: DATA AND ECONOMIC ANALYSIS....52
4.1: American Airlines Mishandled Baggage ........................................................ 52
4.1.1: Flight Delay Challenges in Baggage Handling........................................ 54
4.1.2: TSA Baggage Mishandling ...................................................................... 55
4.1.3: Effect of Passenger Trip Contribute to Baggage Mishandling.57
4.1.4: Major Areas of Baggage Inefficiency ...................................................... 58
4.2: Technology Investment................................................................................... 69
4.2.1: The Role of Scanners in Baggage Processing ......................................... 70
4.2.2: Bar-Code Baggage Scanning Inefficiencies ............................................ 74
4.2.3: Bar-Code Technology Limitations .......................................................... 74
4.3: Regression Analysis to Quantify the Effect of Major Efficiency Factors ...... 76
4.3.1: Operational Mode of AA and AE in DCA .............................................. 76
4.3.2: Categories of Baggage Flow and their Volumes ..................................... 79

iv
 4.3.3: DCA Baggage Flow Mapping with Baggage Mishandling ..................... 82
4.4: Data Analysis .................................................................................................. 84
4.4.1: Effects of AA and AE Baggage Flows on Total Mishandled Bags ......... 84
4.4.2: Effects of Baggage Flows in Different Stations on Mishandling.87
4.4.3: Code 50 - Damaged Bags ........................................................................ 88
4.4.4: Code 93 - Rerouting AA to AA ............................................................... 91
4.4.5: Code 5 - Failed to Load ........................................................................... 93
Chapter 5: DISCUSSION...98
5.1: Information Technology and Operational Efficiency of Baggage Handling .. 98
5.1.1: Baggage Tracking by Scanning98
5.1.2: Human Factors ......................................................................................... 99
5.1.3: Baggage Screening Scanners ................................................................. 100
5.2: Information Technology (IT) and Enhanced Security .................................. 101
5.2.1: Baggage Flow and Security ................................................................... 102
5.3: IT- Enhanced Security Chain Improves Baggage Handling Efficiency ....... 103
5.3.1: RFID Substitute for Bar-Code Improves Baggage Handling ................ 103
5.3.2: Improved Baggage Handling Customer Service Using RFIDs ............. 105
5.3.3: RFID Tags Improve Baggage Handling Efficiency .............................. 106
5.3.4: Data Systems Integration ....................................................................... 107
Chapter 6: CONCLUSION...............109
6.1: Summary of Major Findings ......................................................................... 109
6.1.1: Destabilizing the USA Economy ........................................................... 109
6.1.2: Security Compromise with Cost ............................................................ 110
6.1.3: Baggage Security Threats ...................................................................... 110
6.1.4: Influence of Technology on Airlines Baggage ...................................... 111
6.1.5: Employees Adaptation to New Technology ......................................... 111
6.1.6: Baggage Check-in Restrained by FAA Regulations.............................. 112
6.2: Summary Contributions. ............................................................................... 113
Appendices114
Glossary.123
Bibliography......125

v
 List of Tables

Table 1: Purpose and Duration of Airline Passenger Trip...15

Table 2: Three Months Baggage Mishandling Frequencies64
Table 3: Baggage Handling Process Map Based on Mishandling Types in 2009/10..65
Table 4: Most AA/AE Baggage Mishandled Codes in 2009/10..66
Table 5: Baggage Handling Process Map Based on Mishandling Types in 2010/11..67
Table 6: Most AA/AE Baggage Mishandled Codes in 2010/11..68
Table 7: AA and AE Business Operational Mode at DCA..77
Table 8: Classification of Baggage Routes..80
Table 9: DCA Baggage Flow Mapping with Mishandling Codes 50, 93 and 5..82
Table 10: Mishandled Baggage Parameters in the Regression Model84
Table 11: Damaged Baggage Parameters in the Regression Model....89
Table 12: Effects of Baggage Flows on Rerouting AA to AA92
Table 13: Effects of Baggage Flows on Failed to Load Baggage Mishandling..95
Table 14: Effect of Scanner Use by AA at DCA.99

vi
 List of Figures
Fig 1: Commercial Airport1
Fig 2: Baggage Flow through the Secure and Non-secure Areas23
Fig 3: TSA Check-Point Functions at DCA27
Fig 4: Functions and Physical Flow of Bags in the BRU28
Fig 5: BSO Functions and Physical Flow of Bags...29
Fig 6: Responsibilities for Civil Aviation Security..33
Fig 7: Passenger and Checked-in Baggage Flows at DCA..39
Fig 8: Passengers and Baggage from an Inbound Flight at DCA41
Fig 9: An Illustration of Baggage Data Flow...43
Fig 10: Pie Chart of Baggage Mishandled in Dec-Feb. 2009/10.65
Fig 11: Top Ranked AA/AE Baggage Mishandled Codes in 2009/1066
Fig 12: Pie chart of all the Baggage Mishandled in Dec-Feb. 20010/11.67
Fig 13: Top Ranked AA/AE Baggage Mishandled Codes in 2009/1068
Fig 14: Search Option on BagFinder Home Page72
Fig 15: BagFinder Bag Scan Data Captured by Hand-Held Scanners.72
Fig 16: Illustration of Complete Bag Scan Data..73
Fig 17: DCA Market Operational Areas......78
Fig 18: Streamline of Baggage Handling Process...98
Fig 19: Baggage Flow and Security Screening with Passenger.....102
Fig 20: RFID Visionary Baggage Handling Process and Benefits107

vii
Chapter 1: INTRODUCTION

The United States accounts for roughly 40% of all commercial aviation

activity and 50% of all general aviation activity in the world [2]. There are 449

commercial airports in the United States. These commercial airports differ in physical

size, layout, and number of passengers and volume of flights they handle. At least

421 airports have passenger volume flow of over 10,000 annually. Transportation and

Security Administration (TSA) is a USA government agency which provides and

oversees passengers and checked-in baggage screening at these commercial airports.

According to the number of passengers boarding at each airport, TSA classifies five

airport security categories, as shown in Figure 1.

Source: GAO Analysis of TSA data

Figure 1: Commercial Airports

There are 27 airports in category X, accounting for 6% of all airports in the

U.S. Airports in this category have the largest passenger volumes and the most

security enhancement restrictions in the country. These airports usually have one or

1
more checkpoints screening passengers with more than one screening lanes.1 DCA is

the nations capital airport and belongs to this category.

The Washington Metropolitan Area (WMA) region has three airports: DCA,

Washington-Dulles International Airport (IAD) and Baltimore-Washington

International Airport (BWI). No flights that can connect to each other among these

three airports because they are only 50-70 miles apart. IAD and BWI help in handling

the large volume of outbound and inbound flow of passengers and checked baggage

in the WMA hence relieving DCA from congestion of passengers and checked

baggage. DCA only handles a controlled volume of passenger traffic and checked

baggage.

DCA airport has only three terminals A, B, and C with 15 airline operators and

air carriers. In all these terminals, TSA has established several different screening

checkpoints for passengers and mandates the screening of all checked baggage on

outbound flights of every airline at DCA. TSA has installed and use stand-alone

Explosives Detection Systems2 (EDS) CT scanner and Explosives Trace Detection3

(ETD) machines to check the safety of checked baggage loaded on planes. Due to

September 11 terrorist attacks, Aviation and Transportation Security Act (ATSA) was

enacted in 2001. Before the ATSA, respective airline operators and air carriers used

1
According to TSA, the total number of commercial airports regulated for security in the USA varies
depending on various factors such as the type and level of commercial operations that an airport
operator conducts at that particular airport, the time of year or season where a particular airport is
located, the economic stability of that airport region
2
TSA mandated to screen all checked baggage using explosive detection systems at airports by
Dec.31, 2003. TSA deployed two types of screening equipment Explosives Detection Systems (EDS)
which use computer-aided tomography X-rays to recognize the characteristics of explosives.
3
Explosive Trace Detection (ETD) systems use chemical analysis to detect traces of explosive material
vapors or residues. TSA has optimally deployed use of EDS & ETD machines to maintain the security
of checked baggage.

2
to have total operational responsibility of screening checked baggage for explosives

using private screeners paid by airlines. After the ATSA, TSA was created to handle

all the baggage screening. A lot of different aspects have come up into play

unintended. Since airlines do not have any control over TSA in screening passengers

and checked baggage, the security screening system towards passengers and their

baggage have caused more flight delays and more mishandled baggage at DCA than

before. This situation has made respective airline operators at DCA bear the

cumulative baggage costs from mishandled baggage born by the inefficiency of TSA.

TSAs inefficiency at DCA is due to the poor airport infrastructure design

which wasnt made for accommodating the new passenger screening and baggage

checking machines. TSA improvised by installing in the DCA airport lobbies stand-

alone EDS (CT scanner)4 machines which are less efficient compared to the In-line

EDS (CT scanner)5 machines.

TSA services at DCA delay passengers and checked baggage on boarding

passengers and loading checked baggage onto aircrafts during peak hours6 because

the airport gets higher screening demand during peak hours and sometimes TSA lacks

the capacity with regard to space available for additional passenger lanes and baggage

4
TSA implemented interim lobby solutions by placing the stand-alone EDS (CT scanner) and ETD
(CT scanner) machines in airport lobbies. For EDS in stand-alone mode (not integrated with airports
or air carriers baggage conveyor system) and ETD, TSA screeners are responsible for obtaining the
passengers checked baggage from either the passenger or air carrier, lift the bags onto and off of EDS
machines or ETD tables, using TSA protocols to appropriately screen the bags, and returning the
cleared bags to the air carriers to be loaded onto departing aircraft.
5
In-line EDS (CT scanner) involve checked baggage undergoing automated screening with EDS
machines while on a conveyor belt that sorts and transports baggage to the proper location for its
ultimate loading onto an aircraft.
6
DCA peak hours on weekdays are between 5.00 am 8.00am and 3.00 pm 7.00 pm and Sundays
between 4.00 9.00 pm.

3
screening areas, to process passengers and baggage quickly enough to have lower

waiting times.7

All different airlines at DCA have separate TSA screening checkpoints for

checked baggage. It solves the delay problem to some extent and gives TSA a good

procedure to quickly clear traffic flow. However, separate screening checkpoints

create many more duplicate Bag-Room Control Unit (BRCU)8 for every different

airline to grade and sort out the already TSA screened checked baggage for different

aircraft routes. This scenario makes multiple routing processes prone to human errors

since ramp agents (ramp baggage handlers) sometimes fail to load the right baggage

on the right cart for the right flight schedule. Miss loading the right baggage on the

right cart creates several baggage mishandling9 problems which continually drives up

the cumulative baggage mishandling costs for the airlines. This study aims to analyze

the causes of the problem and find possible solutions.

As of late 2010, one of DCA airport air carriers is experiencing technology

upgrades in processing efficient checked baggage routing. American Airline10 (AA)

at DCA is earmarked as the main case study in the analysis of the baggage routing

costs in this thesis. The airline has implemented bar-code scanners to track all

checked baggage loading onto aircrafts for outbound flights at DCA. AA ramp agents

7
TSA standard waiting time is 10 minutes.
8
Bag-Room Control Unit (BRCU) is place where all AA and AE checked baggage, cleared by TSA
get collected for grading and sorting awaiting loading onto aircrafts. BRCU is located in the secure
areas of the airport. TSA cleared checked baggage get dropped onto airlines conveyor belts leading to
BRCU, sometimes BRCU is commonly called Bag-Room Unit (BRU).
9
Baggage mishandling is when airlines delay (put your bag on later flight), damage the bag, items
missing from the baggage, or lost the baggage completely.
10
American Airline (AA) is an American based airline operating as AA and America Eagle (AE)
owned by AMR. Currently AA is the fourth largest airline in the world with over 1000 aircrafts.

4
in charge of loading checked baggage onto aircrafts scan all checked baggage bar-

code tags at the time of loading baggage on the plane. Scanning bar-code tags helps in

the tracking of these scanned checked baggage because the system would be able

determine the last station where and when checked baggage was scanned. It is in the

interest of this research to evaluate the effects of this technology use on baggage

mishandling.

According to the Travel Consumer Report by OAEP (Department of

Transportations Office of Aviation Enforcement and Proceeding), flight problems

including delays, misconnections and cancellations were the biggest problem of

airlines in USA, and baggage complaints ranked number two with 1,521 complaints

during the period January September, 2010 [3].

For AA and AE baggage handling problems are their number one on the list.

Christine, S of Smarter Travel [4] quoted AA as the worst airline in baggage

mishandling. Part of the AA financial losses experienced at DCA in the past several

years are from the large number of mishandled bags due the inefficiency in baggage

handling and routing process at DCA.

The main objective of this research was to discover the main causes of baggage

mishandling and suggest ways of improving them. Significant amount of work has

been done in other major areas of airport security and screening methods, but there

hasnt been research in the areas of mishandled baggage. As aviation industry faces

an increasing demand for passenger travel, increased passenger security requirements

pose new challenges for airline baggage handling. This issue needs urgent attention as

it directly affects customer satisfaction and economic returns of airlines.

5
 The first chapter is an introduction of baggage handling and security

process at DCA by American Airlines & American Eagle (AA & AE) and

Transportation Security Administration (TSA). The second chapter is the overview of

the airlines baggage operations and air transport competition.

Chapter three investigates the AA & AE and airline baggage handling at DCA

and its security measures with an in-depth look at AA baggage operations. In the

fourth chapter, we collect data and conduct an economic analysis. We identify major

problem areas of inefficient baggage handling and examine the effects of technology

investment on baggage handling operations. Chapter five discusses the use of IT in

enhancing baggage handling operational efficiency and security. Chapter six

concludes with the summary of major findings and contributions. Investigations are

done on the operational baggage routing in air transportation, economic benefits and

political implications on airport security.

6
Chapter 2: An Overview of Air Transportation Industry

AMR Corporation is the parent company of American Airlines (AA) and

American Eagle (AE). AA has been in existence for seventy seven years now since

1934 and has its headquarters at Dallas Fort Worth (DFW) in Texas (TX). This airline

is one of the largest in the world contributing approximately US dollar $ 100 billion

to the USA economy, and operates in hub-and-spoke system in five different primary

markets: Dallas/Fort Worth (DFW), Chicago OHare (ORD), New York City (JFK),

St Louis (STL) and Los Angeles (LAX). On average AA flies 270,000 passengers per

day on 3,300 flights with more than 300,000 passenger baggage throughout the

world.

AE was established by AA in 1984 as an affiliate regional airline to provide

connections at the Americans primary markets, Raleigh/Durham and Boston. AE

enjoys being the largest regional airline in the world with over 300 aircrafts, 1,700

flights a day in 150 cities throughout USA and Canada. AA and AE are founder

members of global Oneworld Alliance a network which brings together big and best

airlines in the world to share customer services and benefits than any airline can

provide on its own. AA is not without challenges in the airline industry. In 2010, it

lost 4 passenger bags every 1000 passengers on their flights, and the total number of

tracer claims for mishandled baggage was 3,483 in 2010 and 3,825in 2009. On

average airlines spend US $ 100.00 on every bag mishandled, therefore using that

measure, AA in DCA lost US $ 348,300 in 2010 and US $ 382,500 in 2009.

With economic down-turn since 2008, the oil market crisis in the Middle

East and military action in Iraq and Afghanistan, in 2009 caused a shrink in

7
passengers travel but regained in 2010 by 5%. Approximately 478 million

passengers took a flight on one of the 10 largest airlines in USA to fly domestically in

2010 with an increase of 40 million passengers from the previous year 2009 [5].

American Airlines (AA) alone serviced 65 million passengers each year in 2009 and

2010, while American Eagle (AE) serviced 13million in 2009 and 11 million

passengers in 2010. [5] American Eagle (AE) lost 15% of its passengers volume in

2010 compared to 2009. The chances of passenger bags being mishandled on any

USA airlines flight are high. One out of 250 checked bags are reported mishandled

[6] and most airlines locate lost bags within 2 days and hardly few bags are

completely lost.

An airlines operation focuses on two objectives: the passenger itinerary and

baggage route. These routes could be the same or sometimes different for some

reasons. Most of airlines in USA introduced charging checked-in baggage for both

domestic and international flights two years ago. American Airlines (AA) started

charging checked bags on flight after a dramatic increase in oil prices in USA and all

over the world because of the American engineered Middle-East war in Afghanistan

and Iraq. Airplane fuel increase forced all airlines to increase airfares and some

airlines introduced a surcharge on checked-in baggage as a way to recover some of

the high airplane fuel costs.

The weaknesses in the U.S. Aviation security were exploited by the terrorists

on September 11, 2001 and resulted in an economic disaster which changed the entire

aviation system in USA and prompted enacting of new legislations of aviation

security. Aviation security and terrorism have made USA federal government to

8
rethink their strategies and make them to redesign the aviation security system.

According to Gerald L. Dillingham, protecting the system demands a high level of

vigilance because a single lapse in aviation security can result in hundreds of deaths,

destroy equipment worth hundreds of millions of dollars and have immeasurable

negative impacts on the economy and the publics confidence in air travel [7].

2.1: Airline Operations and Air Transportation Competition

The way how airlines operate in USA and rest of the world can be visualized

in three airline categories: (1) Major airlines, (2) National Airlines and (3) Regional

Airlines. Major airlines are those airlines that generate more than US $ 1 billion in

annual income and American Airlines (AA) is an example of the major airlines. The

second category is the national airlines with annual operating income between US $

100 million and $ 1 billion. These airlines operate medium and large-sized aircrafts

and some of the examples are Hawaiian and Midwest Express. The last category is

the regional airlines which serve particular regions in USA and capture the niche

market not served by major and national airlines. Regional airlines can be further

grouped into three types according to annual income and passenger capacity. Large

regional carriers usually have annual income range of US $ 20 $ 100 million with

passenger capacity of more than 60 seats per aircraft. An example is American Eagle.

Medium regional carriers operate on small scales with less than US $ 20 million

annual income and use small aircrafts. Small regional airlines are those with no

defined size of annual income and usually small aircrafts with less than 61 seats.

Different airlines serve different geographical markets to target consumers

with different air transportation needs. For instance, a passenger travelling between

9
two small cities has more chances of flying a regional airline than a major airline

which needs to have a stopover at its hub. Most major airlines use a hub-and-spoke

network to route their aircraft traffic and they usually have more than one hub used to

allow them to offer more flights and serve more passengers. Locations of hubs and an

airline owning a hub makes a big difference in the airlines air fares they charge.

Airlines charge more money to its passengers going to its hub because they have

more control on that air service location. Therefore, all passengers that really need to

fly to that hub must have to bear the cost and that is how airlines out compete others.

Hubs also serve the purpose of giving passengers better routes to their destinations

and airlines save money under the hub-and-spoke system by avoiding flying planes

with costly empty seats which lowers its break-even price. As the number of

passengers increases the airline needs to handle more checked-in baggage, which

leads to an increasing level of baggage management challenge. Baggage issues are

one of the airlines competing areas among other airlines in order for airlines to

improve their Airlines Quality Ratings (AQR).

The competition in the USA domestic market especially the non-stop routes

known as point-to-point is intense. Low-cost carriers such as Southwest and AirTran

are leaders in this market segment. This poses a big challenge for major airlines that

usually charge high air fares to their hubs.

Airlines economic strife have forced major airlines and small carriers into

bankruptcy filing and get to reorganize under the protection of chapter 11 of the U.S.

Bankruptcy Code (Chapter 11) in recent years. US Airways, Delta, United are some

of the examples that filed for chapter 11; they successfully reorganized themselves

10
with significantly lower operating costs derived from renegotiated supply, financing

and labor contracts. As a result, US Airways and other two managed to undercut air

fares and again significant market share in the industry, a trick disliked by other

airlines like America airlines that are not under the Protection Act.

Terrorist activities have caused federal government to pay more attention in

airport security enhancements. Carry-on and checked-in baggage loaded on these

aircrafts are the most significant threat to air transportation. Airlines in USA are now

focusing on how baggage is handled on planes and how much it costs the airlines to

safely manage it.

Gasoline price increases in the last two years have made some airlines start

charging US $ 25.00 on every first bag checked-in and $ 35.00 for the second bag.

Currently airlines are collecting millions of dollars from checked-in baggage. Delta

Air Lines in 2010 collected the highest baggage fees of US $ 733 million (in three

quarters), followed by American Airlines with US $ 432 million in 2009, Delta and

American airlines were still on top of the list. Two years down the road, airlines have

raised fees for checked-in baggage, services have improved and number of

mishandled baggage went down to 38%, according to a wall street journal report [9].

Thanks to the additional revenue from the baggage fees, air carriers have

invested in better baggage handling technology and equipment [9]. According to the

report by Department of Transportation in 2010, American Eagle (AE) had the worst

performance of 7.26 mishandled bags per 1,000 among all airlines in 2010 on

domestic flights. American Airlines (AA) took a rank position of 12 out of 18 in

worst performance. AA lost 3.97 bags per 1,000 passengers, AirTran performance

11
was the best with 1.64 mishandled baggage claims submitted per 1,000 passengers

and it ranked number one in 2010 [9].

Together with on-time arrival, involuntary denied boarding and passenger

complaints, baggage mishandling11 is an important criterion in assessing the quality

and performance of different airlines. 12

2.1.1: Airlines Focus on Baggage Improvements

According to DOT report of November 30, 2010, 1.5 million bags were

mishandled in 2010 by all USA airlines, a significant improvement since 2008 when

2.5 million bags were mishandled. The baggage fee charges which was implemented

by airlines in 2008 have helped reduce the number of checked-in bags, which in turn

helps flights run on-time, avoiding late arrivals of bags and missed connections. More

investment has been done in managing baggage efficiently by some airlines. Due to

the huge competition in the airlines industry, most airlines like AA are trying to

improve their baggage handling technologies.

2.1.2: Equipping Airports with Newer Baggage Handling Facilities

The federal government provides finance to airports installing the IN-LINE

automatic ETD and EDS in most of the high passenger traffic flow airports (category

X) in order to increase the speed of baggage screening, tracking and sortation. TSA

11
According to DOT, a mishandled bag includes delayed, claims of lost, pilfered baggage and
damaged. Data is presented as rate of mishandle bags per 1,000 passengers. The AQR ratio is based on
total number of reports each airline gets from passengers that lost, delayed, pilfered and damaged
baggage per 1,000 passengers.
12
Criteria include mishandled baggage, on-time, denied boarding and passenger complaints which
covers over sales, fares, refunds, customer service, reservations, baggage, disability, advertising,
discrimination, animals and flight problems. The data for all criteria can be accessed from the U.S.
Department of Transportation every month- in Air travel consumer Report.(http://dpt.gov/airconsumer)

12
officers now do not need to manually open bags and inspect them since baggage

security screening is more sophisticated, easier to operate and the whole system is

automated. Therefore, fewer officers are used on shift and fewer errors are made.

In addition, there is an increasing trend in the adoption of bar-code scanners

by major airlines. These airlines have moved away from handing papers to baggage

handlers and telling them where bags have to go. Most airlines have invested in new

technology and equipment such as the hand-held scanners that alert the baggage

handler when a wrong bag is loaded onto the flight [9]. The wireless devices and

scanners get updated frequently whenever gates for flight departures and times

change.

Airlines with enhanced baggage handling operations have experienced

tremendous savings. For instance, Delta Air Lines invested US $ 100 million to

improve its hub baggage operations in Atlanta, Georgia. From 2007 to 2009, Delta air

Lines performed badly in baggage handling, however, after improving its baggage

handling operations in 2010, its rate of mishandled bags was reduced to 3.52 per

1,000 passengers, which is better than AA at 3.97 and AE at 7.26 lost bags for every

1,000 passengers on domestic flights [5]. Delta air Lines used to have a conveyer belt

system running only in its check-in terminal, where bags were sorted, then carted to

five other terminals, a process that played a big contribution in missed connections.

Since their use of the automated baggage system with optical scanners, bar-code tag

readers and 14 miles conveyor belts with links to all terminal, baggage services

improved significantly. The new system only takes 10 minutes to connect bags while

it used to take 15 to 30 minutes in old baggage handling system.

13
 According to the International Air Transport Association (IATA), mishandled

baggage costs an airline $ 100.00 on average and the total cost of mishandled

baggage worldwide is about $ 2.5 billion a year. Therefore, baggage handling is not

only the AA and AE challenge, but a universal growing issue that needs urgent

attention . US Airways have instituted baggage improvement program (BIP) studies

like the one in Boston Logan International Airport (BOS) [10]. As a result of several

baggage improvements, they saved $25 million a year and the number of upset

passengers has gone down. US Airways spent a total of $ 16 million in two years on

baggage scanning technology and airport infrastructure modifications. Due to

improved baggage handling services, US Airways mishandled baggage in 2009 was

3.01, which significantly improved to 2.58 in 2010 and ranked 5th out of 18 airlines,

slightly outperforming AA by 1.41 per 1000 passengers [11]. According to Kerry

Hester, US Airways operations planning and support, the airline scans and track 90%

of its bags and that they developed their own software to compare what bags are

supposed to be loaded onto an aircraft, verify it and then alert ramp handlers for any

missing list of bags [9].

AE challenges on baggage handling are still existing because the statistics

show that in 2009, the rate of mishandled bags per 1,000 passengers was 7.89 and had

a small improvement of 6.3% in 2010 [11]. AE is the worst airlines in the baggage

handling with a rank position of 18th out of 18 in 2010. This observation has

motivated me to carry out a study about these two big sister airlines (AA and AE),

and get to understand why they perform poorly in baggage handling at certain

stations.

14
2.2: Operational View of Baggage Routing in Transportation

In November 2001, ATSA Act was signed into law, and formed TSA to

implement the airport security requirements of 100% baggage screening by TSA

officers, through use of canine dogs or EDS-CT scanners, or use of positive passenger

match where baggage-reconciliation procedures to match all baggage and airlines

passengers on board.

2.2.1: Air Trip Duration Effects on Baggage Handling

Business Non-Business

Duration of Passenger Trips Passenger in % Passenger in %

Nights away from home 0 < 3 62 34.6

Nights away from home >4 and < 6 26.8 39.0

Nights away from home >8 11.1 26.3

Source: American Travel Survey

Table 1: Purpose and duration of airline passenger trip

When a passenger is travelling to an airport to catch a flight, the quantity of

bags he or she has is influenced by the duration of his or her trip; and the duration of

the trip is influenced by the trip purpose greatly [12]. As shown in Table 1, 46% of all

air passenger trips are less than 4 days (<4). Passenger trips who are between 4 to 6

days are 34% and passenger trips with longer than 6 days (>6) are just 20% [12].

Data from American Travel Survey shows that, 62% business and 35% non-

business passenger air trips take 3 nights or less. 27% business and 39% non-business

passengers take 4 or more nights. For passengers with air trips more than 8 nights,

11% are business while 26% are non-business. The duration of the trip is greatly

15
influenced by the purpose of the trip because leisure trips tend to be longer than work

trips. Passengers with trips of longer duration are likely to have large amounts of

baggage to check-in at the airport or pick up; this scenario influences the quantity of

baggage expected by the airlines to service and can help to lead to appropriate

baggage handling plan. Business or work trip passengers are not likely to check-in

several bags and their trips are associated with fewer days. Airlines can plan for the

expected volume of baggage if they know the total number expected on a flight and

the social class of their passengers. It can also enable TSA to make favorable work

schedules for their TSA officers who perform the screening job of the baggage that

flow in the airport. Therefore, according to the above statistics, non-business

passengers have caused a major challenge to the baggage handling. The more

baggage is checked-in by passengers at airports, the more it is difficult to manage it

with non-expanding facilities for both TSA and Airlines who take responsibility.

2.3: Economic and Political Implications of Airport Security

Higher Security concerns due to event of September 11, 2001 terrorist attack in

USA, affected USA national policies on how to deal with baggage handling

challenges today. To date, airport security has become a huge factor in influencing

the economic and political climate, as it is known that the aviation industry contribute

14% in the economy. In order to ensure the security of the nation and its citizens,

Congress passed ATSA laws and provided funding to airports to enhance their

security. However, checked-in baggage is still a big challenge to airlines and TSA

16
 2.3.1: Airport Influence on Airlines Business

When USA airlines developed the hub and spoke system which made

possible passengers from other connecting flights to make connection at the hub to

their final destinations, it led to the interdependencies and gave rise to several

possible externalities like flight delays which cause chain delay of other flights, hence

causing a delay in one city due the security breaches leads to further delays in other

cities or stations [7]. For example Atlantas Hartsfield International Airport canceled

and delayed hundreds of flights and diverted all planes heading to Atlanta to other

airports.

2.3.2: The ATSA of 2001 impact on the Airport Security

GAO 1998 reported three major problems in the aviation industry in USA:

weak security of air traffic control systems facilities, access to aircrafts, airfields and

dangerous detection of objects [7]. FAA was not conducting background checks for

airport and airlines contractor employees who were working on the computer systems

and software repairs that could be prime target of computer hackers. There was fear

that if hackers gain access to the air traffic control systems, they could use the

communication system to control aircrafts which could be physically destructive and

economically dangerous if they succeed [7].

Detection of dangerous objects proved to be a big challenge at airports and it is

proved by the rampant increase in the plane hijackings which happen before in

seventies prompting development of passenger screening requirements of identifying

metallic weapons used by hijackers on planes. Literatures states that screeners were

not detecting these dangerous objects and there performances were very low a reason

17
which was tied on the low pay, job stress, low benefits, inattention to trainings and

high turnover.

Use of new technology which is capable of detecting explosives, biometrics

and range of metal and alloys was suggested by experts. More emphasis on biometric

technology through use of biological data to identify and authenticate individual

instantly was advocated as a possible security measure in tracking criminals, possible

terrorist suspects, pilots on cockpit, boarding passengers, and matching passengers

with their baggage, in case of no-show passenger, baggage could easily be removed

off the aircraft. However, passengers developed inaccurate perception about health

issues that might crop up due to use of this new technology embedded in machines

that could be very dangerous if it emits harmful radiation to some individuals [7].

Airlines are nave about the negative effect that could develop from the passengers

and the economic impact on airlines. These biometric technologies and body image

scans sometimes create privacy concerns for passengers and require legal and privacy

issues when searching individuals without violating their privacy.

Using the economic theory, several scenarios were discussed and certain

developments cropped up that; if the federal government takes over the aviation

security, it would be possible to account for the spillover benefits and provide higher

security level at the airport. However, costs could be very high. There were

tendencies of fear that if federal government is assigned full responsibilities of airport

security, there could be monopolistic supply of services by government agencies,

public agencies might under estimate waiting costs incurred by passengers in security

measure performances. However, suggestions to create a trusted travellers database

18
was made and more support for government to manage aviation security because it

has less incentives reducing aviation security quality by cutting costs compared to

private sector managers if they provide security. Private providers scored very low in

this area because they had a history of hiring unqualified security screeners who were

under paid in the way of minimizing costs [7].

ATSA of 2001 created, developed, streamlined security procedures and

protocols which tremendously changed any security breach or violations that could

have happened. To implement parts of the Act, screening machines needed to be in

place at all major commercial airports and a machine cost at most US $ 2 million for

purchase, operation and maintenance. However, they were very slow with false

alarms of approximately 22 of every 100 bags and forcing TSA screening officers to

perform bag searches which wasted more time and resources sometimes may lead to

flight delays and cause airlines to bear some baggage mishandling costs due to TSA

inefficiency.

The ATSA legislation uses key features of production function concepts of

output as aviation security and inputs as production resources [7]. Therefore,

production of aviation security requires labor, capital investment and technology

implementation. The labor inputs such as baggage TSA screeners, law enforcement

officers in the airport, passengers, managers and researchers; capital inputs are

baggage screening machines like EDS, and ETD, access control systems for secured

areas and reinforced aircrafts cockpit doors. The amount of output in combination of

labor and capital inputs is the level of technology. The technological knowledge

increase contributes to increased production of aviation security in research and

19
development efforts by researchers. The new knowledge is embodied in machines and

productive resources [7]. The ATSA Act increased the labor and capital investment

inputs devoted to aviation security and assigned federal government these inputs.

Since federal government took responsibilities of production inputs, labor costs were

incentivized by remunerating TSA officers higher pay of average annual base

income of US $ 35,500 compared to US $15,000 average salary of private screeners

[7]. Other costs were associated with testing, auditing screeners, conducting

background checks and training. Costs also involved purchases of additional

screening equipment, installed and maintained estimated at US $ 5.3 billion [7].

The 2,800 Air Marshals were authorized by the legislation on scheduled flights

to cover twenty percent of all flights and estimated to cover cost of US $ 1 billion

including salaries, training, benefits, administrative expenses and equipment. The

legislation authorized a variety of airport security measures with estimated cost of US

$ 1.5 billion to increase security by deploying federal law enforcement officers in all

secure areas of large airports. Airport reimbursement by secretary of Transportation

in the fiscal year 2002 for increased security costs were authorized by the legislation

and this legislation still required FAA to develop a program for General Aviation

Aircraft13 Security, airplane crews and any passenger on board prior to take-off.

Enhancing this security was estimated at US $ 109 million in 2002 to 2004 period.

Finally the legislation authorized FAA to expand research and development in

areas of biological warfare, chemical and develop technologies which could avoid

successful weapons in airport and planes [7]. More research support were put in all

aviation security technology like baggage screening, explosive detection, passengers,

13
General Aviation Aircraft is considered to be the private aircrafts and charter planes.

20
biometric and information sharing in federal agencies with an attachment cost of US

$ 300 million.

The legislation of ATSA of 2001 impacted the private sector like air carriers,

aircraft operators, airplane manufacturers, trainers and aliens. As a result DOT

imposed a charge of US $ 2.50 fee for each passenger enplanement on airlines to be

remitted on baggage screening and passenger. The aviation industry trainers are

required by law to report certain information of their trainees to federal government

and aliens undergo a thorough background check from the Attorney General prior to

training.

21
Chapter 3: AA BAGGAGE HANDLING AND SECURITY

MEASURES

3.1: American Airlines Operations at DCA

AA and AE are some of the largest airlines in USA, with an average 270,000

passengers flying on AA every day. AA receives more than 239,000 reservations

calls, handles more than 300,000 pieces of luggage and flies about 3,300 flights a day

[13] according to AMR Corporations report of 2010. AA in DCA alone on average

receives about 3,118 passengers per day, handles approximately 6,326 bags and fly

27 in-bound flights a day. AE is partner airline with AA and receives 19 flights on

average a day in DCA, according to the Bureau of Transportation Statistics T-100

market data [10]. AA and AE operate flight services to seven different cities in and

out of DCA every day. The following are the cities in which AA and AE operate from

DCA; Reign Durham (RDU) in North Carolina (NC), Nashville (BNA) in TN, Ohio

Chicago (ORD) in Illinois (IL), John F. Kennedy (JFK) in New York (NY), Miami

(MIA) in Florida (FL), ST. Louis (STL) in Missouri (MO) , and Dallas Fort Worth

(DFW) in Texas (TX). DCA airport has three terminals, A, B, and C, with 15 air

carriers as whole. AA and AE are located at terminal B concourse with three main

gates for AA and three other gates for AE. AA and AE have one TSA check point in

the terminal B lobby where a stand-alone EDS and ETD is installed for screening all

passengers and checked-in baggage for transport on AA and AE airlines.

22
 3.1.1: AA Baggage Physical Flow Chart

Figure 2: Baggage flow through the secure and non-secure areas

AA and AE experience two directions of baggage physical flow processes at DCA. In

the figure 2 above, baggage flowing into DCA is deplaned from the inbound planes

and ramp handlers off loads the baggage from the plane for reclaim carousal if they

are local bags, otherwise they are sent to BRU if they are transfer bags,

connecting bags, or misconnection bags. When ramp handlers cart local bags,

they group them into three parts: Priority bags (PB) for status passengers, priority

23
parcel Service (PPS) packets, and non-status passenger bags. PPS packets14 are

considered baggage that needs special handling and ramp baggage handlers send

them to BSO. PB and others for non-status passengers are dropped directly to the

baggage reclaim belt (carousal) with PBs first followed by the non-status bags. Ramp

baggage handlers have to perform this process in the first 12 minutes of flight arrival

(DCA station standard) and must finish baggage drop-off within 20 minutes (DCA

station standard).

The second baggage flow in the figure 2 is the outbound baggage from DCA.

Passenger drop-off bags at the curbside or ticket counter for check-in. Agent generate

bag tags and place them on bags, then drop them at TSA EDS machine for security

screening. If there is no security concern, then bags proceed to BRU for sortation and

after grading bags, ramp baggage handlers cart them and wait for baggage loading on

outbound flight. Before loading bags into Unit Load Devices (ULDs) on the plane,

ramp baggage handlers make a cross check for which flight to begin loading. If flight

is delayed, or cancelled or seriously damaged, then bags are sent to BSO for baggage

routing and retagging. If no flight delay or cancellations, then bags are loaded onto

the plane for outbound trip. BSO reprocess bags from the cancelled flight and send

them to TSA again for security screening and thereafter bags proceed to BRU for

sortation, then carted to outbound plane.

A possible scenario is when TSA performs an x-ray screening on a bag and

when it fails the test. Then TSA holds bag for secondary screening by using another

method of screening. Usually TSA officers perform physical inspection through the

14
PPS packets that need special handling are live animal, guns, ordinary packets and have to be signed
for them when they are being picked up by their owners.

24
bag and develop a judgment: Cleared or Not Cleared, if cleared, then bag is sent

to BSO for rerouting, and if not cleared, then bag is sent for advanced security

screening laboratory for further tests meanwhile passenger is denied boarding. TSA

Secondary screening takes a lot of time. Considering the limited TSA human

resources at DCA, passenger bags which are placed on secondary screening usually

cant make scheduled flight due to the time taken in this process. This is the reason

why bag has to move through BSO for rerouting and secure a new tag for another

flight.

Another scenario Figure 2 is when a passenger drops-off bags at the departure

counter or curbside area and forgets to present them to an agent for tagging. Then

these untagged bags are sent to BSO for tracking the passenger itinerary. If the

passenger is already on board then bag is rerouted and forwarded to his final

destination.

Finally, the scrolling line in Figure 2 represents the cut line separating the secure

(most restricted)15 and non-secure areas. All areas above the line are secure parts and

below it are the non-secure parts of the airport.

3.1.2: Physical Baggage Flow at TSA Check-Point

At DCA, AA and AE has one TSA check-point in Figure 3 illustrating the TSA

functions at this airport. TSA only screen baggage flowing out of DCA. It does not

screen baggage from inbound flights to DCA. The baggage flow chart starts with

TSA x-ray screening all bags checked-in by passengers flying on AA and AE airlines.

TSA use EDS and ETD CT scanner as their primary screening method and they use

15
Secure or most restricted areas at the airport are those parts that cant be accessed by the general
public without escort. Airport employees can access these areas with use of monitoring codes.

25
alternative methods if there is power outrage (blackout), or when they have excessive

number of baggage at peak time, or more importantly when a bag is placed on hold

for secondary screening16 in Figure 3. If the passenger bag passes the test on the

second time of screening (secondary screening), then TSA officers send bag to AA

and AE BSO for rerouting and get it expedited to its final destination since it is

cleared for security concerns. If this bag is not cleared, (see Figure 3, suspicious

items in the bag), then another method of security screening is applied on that bag

(advanced Screening) and it depends on the physical examination inspectors decision

on the bag content. The inspector uses the TSA security procedures to determine

acceptable and non-acceptable items for transportation on planes. If the bag gets

cleared by the TSA officer, then it is sent to BSO for rerouting and forwarded to

passenger destination. If the TSA officer decides not to clear that bag for air

transportation, then the bag is sent to Testing laboratory facility for further

investigations. After the laboratory tests are finished, if bag is cleared then it is sent

to BSO for rerouting to final destination. If bag is not cleared at this stage, TSA

sends an urgent message to either AA or AE to deny passenger from boarding flight.

Meanwhile the passengers bag gets isolated and TSA generates incident report to

authorities and finally TSA with help of DCA police / (MWAA) detains passenger for

questioning.

16
TSA Secondary screening is one of the functions performed by TSA officers when a bag is red
flagged by an EDS machine for the first screening and it doesnt get cleared by the officer, then it can
be placed on the second round of security check using alternative methods.

26
 Figure 3: TSA Check-Point Functions at DCA

3.1.3: Physical Flow in the AA and AE Bag-Room Unit

In figure 4, BRU receives baggage from two different sources: TSA cleared

baggage for outbound flights and connecting baggage from AA or AE or OA (other

airlines) inbound flights. BRU is an important section of baggage handling at DCA

because it performs the baggage sortation after determining which bags are

transfers or connecting bags for AA or AE or OA. If bags are needed to be

transferred to other airlines, ramp baggage handlers cart and send them to OA

baggage collection places. If some of the bags are DCA Connecting Transfer

(DCT) bags on AA and AE flights, then bag room unit supervisor requests and

generates DRH lists for various flights ready for carting and send to plane for

27
outbound flights. If some bags are not carted yet, it means that they are waiting for

their flight schedules. Sometimes flights get cancelled, or indefinitely delay due to

either bad weather or mechanical condition of the plane, then bags get sent to BSO if

bags wont make flight; otherwise, if flight- is rescheduled then bag room handles the

baggage delivery to the aircraft for outbound flights.

Figure 4: Functions and physical flow of bags in the BRU

28
 3.1.4: Physical Baggage Flow in AA and AE Baggage Service Office

AA and AE Baggage Service Office (BSO) is mainly baggage customer service

department and it is responsible for tracking and tracing, forwarding, and storage of

baggage at DCA. BSO is also responsible for all AA and AE passengers baggage

requirements. They open claims for lost baggage damaged pilferage or delayed to

passengers. A set of BSO responsibilities leads to the physical baggage flow in the

Figure 5.

Figure 5: BSO functions and physical flow of bags

The illustration in Figure 5 indicates as BSO getting inbound baggage from all

the seven stations that have direct AA and AE flights with DCA is channeled to BSO

from TSA for outbound flights, if they missed their flights for security reasons. Once

all bags get to BSO, employees process them through system tracing and tracking;

thereafter logical comments and routing or forwarding signals are generated in

29
Baggage management systems (BMS) which allows credible and precise information

to be accessed by the responding stations. After the system is updated, baggage-

agents in BSO physically place expedite tags onto the bags and then send them to

TSA for explosive screening in order for these bags to gain access to the BRU. In

case of lost baggage, or damage or pilferage, a passenger is given services in BSO by

opening baggage claims depending on the issues arising from each passenger.

Opening a baggage claim is done through generating specified information in the

system given by the passenger depending on the type of complaint. If baggage is

missing from the reclaim carousal or lost, then agents perform the tracing in the

system. AA and AE use BagFinder17 interface and Sabre system to access and

respond to generated baggage signals from other stations. When bag is located in the

system, then passenger is notified and promise to deliver the bag to his or her address

without any charge. When this bag happens to show up from any inbound flight to

DCA, then the BSO agent finalizes the passenger claim by generating the baggage

flight arrival information and a delivery note know as Baggage Delivery Order

(BDO) is activated which triggers a BDO hard copy print out for the authorized AA

and AE delivery company to pick up the bag and send it to the passenger address.

If a BSO agent cant locate bag immediately, then the agent sends baggage

search signals18 in the BMS to track and trace the lost bag. At this stage passenger

claim is kept pending finalizing because DCA hasnt received that specified bag.

17
BagFinder is a web interface system developed and used by AA and AE employees and
contractors to input, access, and generate baggage information.
18
Baggage Search Signal refers to information input in the system through using BagFinder interface
to inform other stations that another station is looking for this bag. It should be forwarded to that
location.

30
 Another scenario is that, if a passenger did not authorize AA agent to deliver

the bag to their home or hotel address, then BSO keeps the bag in its storage room

known as On-Hand Room (OHR) for maximum of five days as per AA and AE

procedure. If a passenger does not pick up bag then, it is sent to Central Baggage

Service (CBS) for recycle and passenger cant claim this bag any further because the

airlines consider bags stored for more than 5 days as abandoned baggage and has

no more storage space.

The last scenario is that if passenger says that no bag is missing or lost, but

damaged bag exist, then the BSO agent opens a damage baggage claim19 to only

passenger who falls into the AA and AE baggage liabilities guidelines and

procedures. This claim may be denied if the nature of damage falls outside the AA

covered baggage parts. Otherwise, BSO takes damaged baggage claim and generates

baggage damage information that is required to process the claim reimbursement20

from the AA and AE baggage repair facility known as Rynns Repair. After the

system is updated by the BSO agent, then the bag is physically forwarded to the

repair facility with specified Blue tags. Once rerouting is finished, then damaged bag

is sent to TSA for screening and thereafter to bag room unit for sortation.

19
Damaged Baggage Claim are those claim specifically opened for triggering a baggage repair
process to start.
20
Claim Reimbursement refers to a form of compensation given to a passenger towards his or her
damaged or lost items from the bag.

31
3.2: An Operational Process View of Baggage Routing at DCA

To manage the flight information, AA and AE use the Baggage Management

Systems (BMS) as supporting tools in processing, coordinating and managing all

activities of ground handlers at DCA airport. The BMS holds information about all

arriving baggage, and their baggage routings on specific flights [14]. Data with BMS

is kept in a form of aggregate numbers like total bags misconnected, number of bags,

bags misconnected with Minimum Connecting Time (MCT) for every flight. The

information held in BMS is used to determine which bags are loaded on a plane,

which are dispatched to the arrival hall and which are transferred at other cities or

hubs [14]. BMS also does another function of holding number of times transferring

bags connects. However, for some reasons probably legacy issues and their system

designs, mostly they do not maintain the information on each bags specific location

in the plane belly [14]. BMS is basically a useful system because it provides some of

the reporting functionality, wherein they report useful statistics like misconnected

percentages, Passengers Arriving Without Bags (PAWOB) and the bags

misconnected with connecting times in excess of MCT [14]. The practical experience

of Baggage Service Office (BSO) at DCA in using the BMS is that sometimes the

system cant track or give any update information on the status of the bags, other than

showing bags being checked-in by passengers. It becomes too hard to identify the

whereabouts of bags until those bags are located at any other city and get documented

in the system manually. That is only when all the BMS users can access the new

updates; however, this could have taken hours or days. This scenario hampers

customer service baggage office (BSO) the chance to offer the right information

32
about baggage traces and leads to poor baggage delivery promise to the passengers

address. Meanwhile, lack of baggage mishandling information details creates and

forces BSO agents to issue compensations to passengers with lost bags starting from

the minimum value of US $15.00 to a maximum of US $ 3300.00. AA and AE loses a

lot of money, lowers its profits and damage its brand name by dissatisfied customers

in baggage handling operation due to the inefficiency of the available technology.

TSA operate hand-in-hand with air carriers, airports and independent

contractors to protect and manage a combination of laws, regulations and resources in

the aviation industry. The program is a system of shared responsibilities and airlines,

passengers and air cargo users benefit in the program and as return they pay for it

[15]. TSA charges US $ 2.50 per passenger to screen all the airlines passengers and

their baggage, while passengers pay their premium in the airlines ticket price and

cargo shipments. See the roles and responsibilities of all parties in Figure 6.

Figure 6: Responsibilities for Civil Aviation Security

33
 Some passengers misuse of their checked baggage as explosive weapons, have

engineered the role of security enhancement being more important in the aviation

sector currently. Passengers are uneasy with rigorous security activities at DCA and

in all other airports, but they feel more secure on board than before the security was

enhanced like it is currently.

The enhanced security has raised the cost of air travel and airlines are

struggling keeping cost at minimum while continuing to increase their performance

and quality travels. Baggage handling is one of the major challenges of the current

security measures. The goal is to improve quality baggage management, speed and

efficiency of baggage transfer across a hub, while minimizing cost associated with

traffic increase. [16] AA and AE have increasing challenges at their DFW, ORD and

MIA hubs which are directly connected to DCA, making efficient handling of

baggage transfers and increasing MCTs. If we take into account the prior security

status of every bag at the point of origin, then connecting these bags should be moved

through the transfer processes quicker since they were already pre-screened at their

originating station. However, FAA doesnt allow this compromise to take place due

the 100 percent mandate of baggage screening for both domestic and international

connecting flights.

Security regulations changes in response to security threat events have fostered

no choice for air carriers and airport planners but to simply comply with any change

mandates. Changes have not only affected security processing requirements, but also

the aspects of rapid increase in baggage handling. Airport security has a direct effect

on the cost of the airline fare and checked-in baggage. AA and AE airlines fares are

34
slightly higher than its associate seven airports because of the tight security and a

high MTC at DCA. The fact that regional airlines like AE have short-haul routes, they

check-in fewer baggage than major airlines like AA therefore they perform better in

managing their baggage [17]. However, most of the regional airlines end up with a

very poor performance in baggage handling because their schedules are dictated by

their major airline partners to keep stream of connecting passengers moving to

connect on larger flights, regardless of baggage not making connections [17].

The need for safety has led to an increase in the cost of security because new

security measures on passengers and checked-in baggage are demanding new

equipment and new procedures at all airports. The cost of passenger and baggage

screening including equipment cost at DCA is approximately US $ 6 billion [18].

Passengers and baggage security processing takes longer time and sometimes delay

flight departures at DCA usually at peak time. This scenario causes misconnections

at other cities for transfer baggage which eventually costs the airline more money and

frustrated passengers whose bags are lost at their final destination. On average the top

10 airlines in USA handle about 500,000 passengers every day, with an average of 4

bags lost out of 1000 passengers [19] and average of US $ 100.00 cost per

mishandled bag leading to an impact of US $ 73 million spent per annual lost

baggage. See the calculation below:

{500,000 bags * 0.004 lost bags =2,000 bags}

{2,000 * $100.00 = $ 200,000/day cost for mishandled or lost bags}

{$200,000/day * 365 days = $73,000,000 spent per year on mishandled baggage.}

35
The bottlenecks of security are born expensively by airlines through baggage

mishandlings which portray a negative experience by their passengers and

consequently eroding on their business brand preferences [19].

Performance of baggage reconciliation21 is good for lowering operating

overheads and requires safety because historically the 1988 Pan Am 103 Lockerbie,

Scotland tragedy killed all people on board without the perpetrators as they boarded

in Frankfurt and deplaned in London, but their baggage stayed on plane which

exploded later [19]. In USA, if you purchase an air ticket using cash and / or within

less than 24 hours, then airlines and TSA place you on the Positive Passenger Bag

Matching (PPBM) as selectee passenger on all your travel routes. For this matter use

of good technology like scanners could enable increased visibility of bags and for any

reason the bags can easily be retagged and map data with passenger list or could

easily be located and removed off the plane if passenger is not continuing on

connecting flights [19]. The fast location and removal of bags from the aircrafts

maintain good flight schedules and saves a lot of money that would have been spent

on airport gate delayed flights. Airlines pay more than US $ 10,000 for every five

minutes a plane delay at the gate [19]. Flights delay cause planes being rerouted to

other gates and backup builds on runway which leads some times to delayed landing

of other planes and sometimes leads to misconnections due to high MCT.

21
Baggage Reconciliation is a security performance called Positive Passenger Bag Matching
(PPBM) done by TSA during the passenger and baggage check-in at the TSA checkpoint at the airport.
It could be performed again for connecting passengers and transfer bags at connecting cities. Passenger
must be on the same flight with his or her baggage.

36
 3.2.1: The Current Tracking Technology at DCA

DCA is marked by TSA as the most sensitive airport in USA that needed the

most security enhancement measures in order to safe guard the interests of the

country. This airport is in the heart of the WMA where most of the most important

federal properties are located and since September 11, 2001 terrorist attack in

Washington DC, New York and Pennsylvania (PA), FAA the mandated overseer of

TSA instructed TSA to enhance the security of DCA airport. From 2001 to date,

security operations were beefed up at this airport and passengers and their checked-in

baggage must be one hundred percent screened. To do so, TSA used the easiest and

the quickest way to implement the measure within the prescribed time in the mandate

and installed a baggage handling screening system referred to as STAND-ALONE

in all airports lobbies in order to take care of the security issue. Stand-alone system

is where TSA installs EDS and ETD-CT scanners in the lobbies of the airport to

screen the baggage and thereafter turn the baggage to the airlines to be processed

manually.

After TSA screening, TSA officers pick up bags and drop them onto the

airlines conveyor belts for further airlines processing until baggage get to the aircraft

for an outbound flight. The process from TSA to the time baggage get to the plane is

very slow especially during peak hours of the airport operations because of the

congestion at the TSA security screening points of which the throughput of these

machines are low. A typical lobby-based screening unit consisting of a stand-alone

EDS-CT scanner machine with three ETD machines has a baggage throughput of 376

bags per hour with a staffing equipment of 19 screeners [20, 21]. Meanwhile TSA

37
estimated that approximately 425 bags per hour could be screened using the in-line

EDS machines with only four screeners (staff requirement) [20, 21]. So in-line uses

less manpower, and more throughputs which could be better operational efficiency

compared to stand-alone EDS machines which uses about five times more screeners.

In almost all airports in USA including DCA use the computerized tomography

(CT) scanning system to screen checked baggage for all airlines outbound flights in

order to reduce the terrorist threat to the civil aviation industry in USA airports. The

use of this technology is supplemented by use of canine olfactory capabilities,

positive passenger bag match and manual searches [23].

3.2.2: AA and AE Data Flow

AA and AE at DCA use a joint operation equipment facility in baggage

handling, a system which is cost effective to both airlines. So the baggage data input

for AA and AE is separate in system but operating on the same network. These two

airlines feed each other with passengers and baggage in order to satisfy transport

needs. AE is regional airline flying short distances where AA did not fulfill; AE feed

the hub with passengers and baggage while AA flies longer distances from the main

hubs. AA has two main hubs in USA namely Dallas Fort Worth (DFW), Ohio

Chicago (ORD) where most passenger and baggage flights make their connections to

final destinations. Figure 7 below illustrates the activities that passengers and

checked-in baggage go through from check-in up to boarding the plane for an

outbound flight from DCA. Figure 8 illustrates similar activities when passengers

deplane from flight (inbound) and go all way through to the carousal to reclaim

baggage and if mishandled proceed to BSO to open claim depending on the type of

38
mishandling. In all the stages illustrated in the two figures below, there is data

captured at some points, which is used in the monitoring and tracking the baggage in

the routing network in all other AA station elsewhere.

Figure 7: Passenger and Checked-in Baggage Flows at DCA

Figure 7 demonstrates the flow of both the passenger and his or her checked-in

baggage from the airline ticket counter at DCA until when an outbound flight will be

boarded. The arrows in Figure 7 running from left to right, showing the passenger

movements and their baggage from the curbside or ticket counter all way through to

the Aircraft Operating Areas (AOA). The boxes indicate different activities at

different baggage flow stages. The passenger is issued boarding pass, bag tags and

checks-in, his or her bags also get dropped to TSA for screening. The passenger

leaves for sterile areas22 to the departure gate and wait for boarding time. Meanwhile,

22
Sterile areas are located on the airport concourse where passengers gain access to boarding aircrafts.
TSA controls the sterile areas at the three terminals at DCA with checkpoints where physical screening
is conducted on every individual and their accessible items for explosives and prohibited items. TSA
officers can deny any passenger beyond the screening location leading to the sterile areas if screening
is not performed or inspected in accordance with law, regulation and screening standard operating
procedures.

39
his or her bags are also moving through different processes without the passenger to

catch the same flight. Before the passenger boards and gets seated on the outbound

flight, his or her bags must have already gone on the plane belly 15 to 30 minutes

before departure time. By the time passenger checks-in, TSA screens their bags and

performs a passenger bag match to meet the FAA rule of passengers should be with

the checked-in bags on same flight. If the bags are cleared by TSA screening officer,

they are placed on AA and AE conveyor belt to descend to the bag room unit (BRU)

for sortation. AA and AE agents manually select bags for due scheduled flight and

cart them for enplanement. Ramp handlers get the loaded carts from BRU to Aircraft

Operating Areas (AOA) where baggage is scanned by loading team into Unit Load

Devices (ULDs) on the plane. Local bags23 are packed in different ULDs from

transfer bags24 and priority bags25 for easy and quicker identifications at the final

destination of the flight. If there is no delay scenario on passenger bags either at TSA

screening point, or bag room unit (BRU), then the bags catch the same flight as the

passenger. However, some times TSA holds bags for secondary screening at DCA

and they fail to catch the flight. This security related baggage problem is not

significant in DCA according to the statistics of AA mishandled bags performance

data in table 2.

23
Local bags are bags with no connecting flight segments.
24
Transfer bags are those bags with connecting routes to other cities. All information is placed on the
tag for both machine reading and visual identification by manual sortation.
25
Priority bags are bags with an orange label placed on the bag tag for identifying AA and AE status
passengers. These bags are given priority treatment to get on an outbound flight and also get to be
dropped at reclaim carousal first for inbound flight.

40
 Figure 8: Passengers and Baggage Flows from an Inbound Flight at DCA

Figure 8 above demonstrates how the passenger on an inbound flight

transcends from the plane with his or her bags to the carousal until leaving the airport.

The arrows in the figure show the different movements of both passengers and their

checked-in baggage deplaning from the inbound aircraft. The boxes represent

different activities which take place right from the AOA26 to BSO27. When flight

deplane at DCA, all passengers walk through a jet bridge to sterile areas (concourse)

and descend towards the baggage reclaim areas (carousal) following signs to the

lower level of the terminal B for AA and AE inbound baggage drop off. Passengers

go through TSA security spot but need not be screened again since they were already

screened at the point of origin. Baggage also descends from the same aircraft of

26
AOA is Aircraft Operating Areas and are located in the most secure areas of the airport.
27
BSO is Baggage Service Office where all passengers on an inbound flight could make their baggage
claims in case of any mishandling. This is the last AA and AE physical area where the passengers
could be assisted for their baggage concerns while still at the airport.

41
passengers and ramp baggage handlers secure all local bags from the plane to carts

and run them to the reclaim baggage carousals, all transfer bags to Other Airlines

(OA) get dropped to the respective airlines bag rooms and for those transfer bags

from AA to AA or AE get dropped to AA bag room Unit (BRU) for sortation to

another connecting flight. If these bags misconnected and there are no available flight

in the day, then they get transferred to BSO for rerouting in the BMS system and wait

for another flight in the next day. According to the AA and AE statistics at DCA, the

problem of misconnection is significant. I have identified some problem areas in AA

and AE operations which are discussed below.

There are different baggage tracking systems used by AA and AE to capture,

monitor and use the baggage information to process baggage requirements at DCA

airport. The Figure 9 below shows different stages where data is captured, monitored

and used in the baggage routing processes. Different technologies such as hand-held

scanners, EDS and ETD - CT scanners are used by TSA, AA and AE to have the

baggage information flow in the BMS network. Data capturing is trigged when

passenger checks-in at the airport check-in ticket counter or curbside area. Also data

is captured when known shippers28 tender in their Priority Parcel Service (PPS)

packages for shipping on AA or AE flights in the BSO. AA and AE do not have cargo

department at DCA, so the shipments of PPSs are handled in the BSO for routing.

PPS transactions have specified strict procedures regulated by FAA and implemented

by TSA. Most data is captured in the BSO because that is where most baggage

information is generated. As BSO generates more detailed information updates

28
A known Shipper is a TSA authorized shipper or courier who makes shipments on airlines flights.

42
concerning baggage, the easier it becomes in tracking the lost or delayed baggage in

Baggage Management System (BMS) network. Therefore, efficient data capturing

points are essential to the effective recovery of lost baggage.

Figure 9: An Illustration of Baggage Data Flow

Note: PPS- Priority Parcel Service29 is located in BSO, ULD- Unit load Device30 is

with ramp baggage handlers.

The flow chart above shows the most areas where baggage information flow is

captured at different stages. The bag check-in areas are the curbside and ticket

counter for the airlines, where passenger baggage information is updated. TSA may

capture more data if bags are placed on secondary and advanced screening and after

TSA, bags go to BRU where data continue to be captured when sortation is taking

place. From the BRU when a bag is confirmed on flight, ramp baggage handler scans

the bag before placing it in ULD for outbound flight. Data is captured at this stage

and it helps other stations in the baggage management. If the flight is outbound, ramp

29
PPS- is priority parcel service, an AA department which allows shipments of small packages and
small animals on AA and AE flights within USA and international. The department is serviced by BSO
at DCA. There is no cargo department for AA and AE at DCA.
30
ULD- is unit load device, containers which ramp handlers use to load bags into and get loaded onto
the plane belly with tracking numbers and type of baggage inside the bins.

43
baggage handlers retrieve all local bags and send them to the carousal for reclaiming.

More data is captured at the reclaim belt when BSO monitor and record information

when the first bag was dropped at the carousal since flight arrival and also record

when the last bag was dropped on belt. BSO performs the last segment of data

capturing when a passenger makes any kind of claim at BSO or when known or

unknown shipper31 tends in a PPS shipment.

Baggage Performance Management (BPM) is important because they reduce

the level and rate of baggage mishandling by having efficient and effective track and

trace system management. AA track and trace baggage in DCA through data input

feeds from different baggage information flow (see Figure 9 above) levels right from

the baggage check-in through TSA check points, BRU, ramp handlers and pilot

manifest before flight take-off. AA and AE Check-in agents in DCA experience

sizeable number of passengers every day who check-in late for their flights and

automatically lead to late baggage check-in. This scenario begins the process of

checked-in baggage having high chances of not getting on the flight because the

baggage has to go through a slow TSA security screening for hazardous material a

process called Hold Baggage Screening (HBS) [14], then to baggage sortation32 in

BRU if they passed the security screening with TSA.

Baggage sortation system in DCA is not automated; bags are manually handled

(selected, graded and matched) by agents, so if a passenger checked-in baggage

31
Unknown shipper is any person without any TSA documentation authorization to make shipments
on planes. Individuals are allowed to make shipments if a packet is less than one pound or shipping a
live small animal (pet).
32
Baggage sortation is when bags and parcels get collected in Bag-Room Unit (BRU) and baggage
handlers manually select, grade and match them according to their tags information routes.

44
during peak hours, then it takes long time to get identified in order for this baggage to

make a flight. Loading baggage on the flight is done 15 to 30 minutes before flight

departure [14] and this gives no room for late passengers checked-in baggage to

catch flight. Therefore, these bags are susceptible to get left for another available

flight if the chances are still there in a day and at this point, the passengers get

separated from their bags at the point of destination. This is one of the reasons for

baggage mishandling at check-in level. The data generated in the system begins to be

inaccurate and needs to be updated for quicker recovery of passenger baggage. In

DCA, BSO takes responsibility in updating BMS system with all baggage that missed

connection, missed flight due late to check-in or TSA security check delay with new

routing information for tracing and tracking mishandled bags in custody of AA and

AE. Therefore, available, and timely updated baggage information can speeds up

quick recovery of mishandled baggage and lowers AA cost spent on baggage tracing

which also reduces the level of stress impact on the passengers who lost the baggage

in the due course.

After generation of data for the baggage and PPS at the check-in point and

BSO, the baggage and PPSs descends to TSA check-point for explosive and other

prohibited item screening. Data is generated when the bags dont pass first test, and

then a secondary screening is performed. If it passes then those bags get cleared for

bag room sortation managed by the AA and AE. If the passenger bags dont pass the

secondary TSA screening, then passenger bags match is performed and the passenger

is notified and isolated while the bags descend to advanced screening (laboratory

test). More data is generated at this stage and passenger may be stopped from taking

45
the flight or even get arrested by authorities. The data captured at the TSA level is

shared by the airline and BMS is updated.

In the bag room unit of AA and AE, PPSs receipt is acknowledge and data is

generated in the BMS network by the crew chief. Also a DRH list33 is generated in

the BMS when a scheduled outbound flight is 30 minutes due to aircraft take-off.

This generated data in the bag room unit helps the ramp baggage handlers to know

how many and how much space that they need to load onto the plane ULDs and plan

the weight and balance issue which is usually a challenge on loading planes.

The DRH list is accessed through the hand-held scanners used by the ramp

baggage handlers. Data is again captured at the aircraft loading time with help of the

DRH list which is generated before to confirm the plane load requirements. Hand-

held scanners at this stage are very useful in data collection. They reduce

tremendously the amount of mixed bag errors. The hand-held scanners used by AA at

the Aircraft Operating Areas (AOA) during the plane baggage loading records

number of baggage loaded where they are destined and their corresponding names on

the aircraft. The use of scanners can notify the loader a wrong bag if it is loaded on

the aircraft. All this data captured is sent to the BMS network for trace and tracking

purposes in all AA and AE airport stations.

The last stage before outbound flight takes-off is the pilot getting the passenger

manifest list, amount of fuel loaded, number and types of PPSs34, and the baggage

33
DRH List is list of bags and PPSs showing the total number and estimated amount of weight
expected to be loaded on the plane. The list also takes into consideration the amount and weight of fuel
on the plane (Loading Sheet).
34
Types of PPSs refer to the different kinds of priority parcel service like biological organs, live
animals, documents and diplomatic packages.

46
inventory document in the plane system tracking device. Final data captured by the

pilot during plane takeoff is again updated in the BMS network.

3.3: AA Baggage Policies and the Role of Baggage Service Office

Historically, the first ever design of a bag tag was known be as separable

coupon ticket which was patented in June 1882 by John M. Lyons of Moncton in

New Brunswick [24] and by 1990 a bag tag included basic information as name of the

airline or carrier, flight number, six digit code and airport of arrival name. To-date a

bag tag is more secure with a barcode printed on an adhesive sticker which is not

easily duplicated.

According to the Warsaw Convention of 1929, [25] amended at the Hague,

1955 and by protocol number 4 of Montreal, 1975, [26] checked baggage will be sent

to owner, but in case of damage a complaint must be made within seven days of

receipt; for delay , complaint must be in twenty one days from the delivery date for

international passengers. In Chapter II, Article 4, of the Warsaw Convention [25]

stipulate all the required standard bag tag used by all airlines and state the liability

limits of the airlines to passengers as not less than US $ 75,000 in legal fees and

costs. However, liability for delay, damage or loss to baggage is limited to

approximately US $ 9.07 per pound or US $ 20.00 per Kilo for checked baggage and

US $ 400.00 per passenger for unchecked baggage by international passengers. For

USA domestic flights, Federal rules require any limit on an airlines baggage liability

to be minimum US $ 3,300.00 per passenger or current amount mandated by 14 CFR

47
254.5 [27]. Most airlines including AA and AE assume no liability for passengers

fragile, valuable or perishable articles.

3.3.1: AA and AE Baggage Policy and Procedures

The early arrival policy allows passengers with checked baggage to travel on a

flight that departs earlier than the baggage checked-in flight when travelling in USA.

This policy dont apply when there is over sales, misconnects, canceled or delayed

flights, any type of baggage rerouting, change of final destination or connecting city

and change from connecting flight to nonstop or likewise [28].

For situations where early arrival policy doesnt apply, a normal Baggage

Change Order (BCO) procedure will apply and passengers will be allowed to open

baggage claim for bag delivery without a Cash On Delivery (C.O.D) at the final

destination, or passengers may wait for his or her bag on the earlier scheduled

baggage flight. If bag doesnt show up on the scheduled flight, the BSO agent opens

bag claim tracer. If this baggage claim tracer is created before the arrival of the flight

on the bag tag, the mishandling will be charged to the city that created the tracer [28].

When a passenger checks-in a bag after cut-off time (usually 40 minutes before

flight departure time) because the passenger did not arrive at the airport in time or

their baggage was refused at the TSA security checkpoint, then Ticket counter agent

or BSO agent advises the passenger that bag will be arriving on the flight indicated on

the bag tag or passenger can wait for the bag or open a baggage claim and will have

the bag delivered to passenger address without a C.O.D. In case the bag arrives with

damage or pilferage, then BSO agent creates a damage or pilferage claim.

48
 3.3.2: Handling Baggage Claims for Passengers

AA allows two pieces of checked baggage for domestic flights, one of 25 kg

(46 pounds) maximum weight and 45 inches of maximum size. For international

flights the policy includes two pieces of 23 kg (46 pounds) of maximum weight and

62 inches of maximum size. AA charges US $ 15.00 for every first checked-in bag

each way and US $ 25.00 for the second bag each way. AA does not charge any bag

service fee on full-fare tickets in Economy Class, Business or First Class; passengers

on AA code share flights not operated by AA and AE; passengers travelling on

government or military fares or military active duty; AAdvantage Gold or

AAdvantage Platinum or AAdvantage Executive Platinum members; one world

alliance members [29].

Excess baggage rules for AA and AE indicate that if a passenger exceeds the

free baggage permissible limit allowed, then charges may apply on any excess weight

and size. If a bag weighs more than 51-70 pounds, then additional charges will range

between US $ 25.00 to 95.00; for bags between 71 to 100 pounds, it costs US $ 60.00

to 90.00; and a fee of US $ 80.00 for any bag with linier inches 63 to 115. Any bag

weighing over 100 pounds and 115 linear inches are not accepted [29]. When

passengers are unable to locate their bags upon arrival, then they have to open

baggage claims for the delayed baggage.

49
3.4: Transportation Security Administration Baggage Policies and Procedures

TSA is a federally mandated government organization authorized to implement

all the civil aviation security at all airports in USA under the Aviation and

Transportation security Act of 2001 (ATSA) (Public Law 107-71). TSA is mandated

by Congress to perform all baggage screenings responsibilities at airports and ensure

safety of all baggage and passengers intending to fly on all planes from that airport.

TSA has a baggage screening investment strategy program referred to as

Electronic Baggage Screening Program (EBSP) for accelerating the deployment of

Explosives Detection System (EDS) equipment and automated checked baggage

screening systems at USA airports, for improving the security and reducing the life-

cycle costs [30]. The current technology deployed at DCA rely on stand-alone EDS

and Explosives Trace Detection (ETD) equipment for the primary screening of

baggage prompting suboptimal screening systems and resulting in elevated life-cycle

costs and increased processing times [30]. TSA has not found it easy to match up

traffic growth with equipment processing capacity and 100% electronic compliance

which require more adequate capital investment and increase in TSA screening

officers staff levels. According to TSA, without expediting capital investment, the

life-cycle replacement demands for the initially deployed screening systems will stop

investment in new optimal systems, slow down deployment of EDS equipment to

additional airports, and eventually increase costs [30].

50
 3.4.1: TSA Security Requirements and Programs

Commercial aviation, 49 CFR 1544 describes all required security measures for

six programs which are not seen by public, aircraft operators and others [31]. The

most relevant security program for baggage screening in this research is EBSP. The

fact that baggage screening is a federal responsibility, the Aviation Security Advisory

Committee (ASAC) suggested that federal government should fund all the replacing

and upgrading of the many current suboptimal initially deployed systems [30]. In the

suggestions the following legislative actions were recommended for the investment

strategy: Creation of a Tax Credit Bond (TCB) program for airports to issue TCBs in

helping fund the infrastructure which will accommodate the optimal EDS baggage

screening systems. In this program, airports and airlines had an effective 25% share

of facility modification costs borne [30]. Federal appropriations for purchasing and

installing EDS amounted to at least US $ 435 million per annual. The recommended

20 year present value cost (PVC) of EBSP (2006 2025) was US $ 23.3 billion,

where the aviation sector projected costs would be US $ 3.6 billion and federal

government was projected to cover US $ 19.7 billion [30]. It was projected that, there

is need to bear the new and substantial costs of installing, operating and maintaining

complex baggage handling systems which can support optimal baggage screening so

that a total net effect of increased investment in optimal EDS baggage screening will

reduce the whole life-cycle costs by US $ 1.2 billion. The cost saving is relative to

the current rate of investment like TSA screening staff and will prevent increase of

TSA screening staff costs in the future [30].

51
Chapter 4: DATA AND ECONOMIC ANALYSIS

4.1: American Airlines Mishandled Baggage

In consideration with AA passengers taking an outbound flight from DCA, I

have identified several major areas of inefficiency in the baggage handling. When a

passenger drives to the airport to catch an outbound flight, he or she either checks-in

at the curbside or ticket counter. At DCA first time flyers are confused about the TSA

screening drop off at either curbside or ticket counter and ended up their bags not

being tagged for route. It might happen that a passenger, who dropped the bags at

TSA, simply proceeded to the self-check-in kiosk thinking that everything is well

done. One hour later, the passengers bags ended up in BSO to figure out who owns

the tag-less bags. AA or TSA cant screen and place on plane any passenger bag

without identifications (name tag) placed on the bag. This bag has a great chance of

missing the flight, on which the passenger went on, then automatically it is counted

lost and the reason will be bag has no tag. This is a mishandling issue due to the

passenger ignorance.

AA statistical also shows that its agents tagging wrong bags at the time of the

passenger trying to check-in at the ticket counter. Rushing to clear the number of

passengers in line has caused grave mistakes by AA agents and stressed a chain of

passengers having wrong tags on their bags going in different directions than the

passengers. The mishandled bags and will have to cost AA to trace and track them

52
until they get reunited with the passenger, which could be number of days. On

average the airline spends US $100.00 on every mishandled bag[19].

AA and AE agents make more mistakes when they dont pay close attention to

passengers information. Many times passengers with similar last name get mistaken

by these AA agents and wrong bag tags were issued to passengers. Their bags get

misrouted to unintended destinations. This type of lost bags is due to Agent error.

As a result the airline pays a high price of having an upset passenger and incurs a

large tracing cost of reuniting the bag with its owner. This passenger may not even

like to fly AA or AE any more with pretax that their employees are not dedicated to

their job.

When passengers check-in late towards their flight closing time, usually 40

minutes before departure, passengers risk the chance of their bags not getting on the

flight from DCA to their destination on the same flight with them. The issue is that

bags from the bag room unit (BRU) to the aircraft loading takes place between 15 to

30 minutes before take-off, but the checked bags for the late passenger hasnt even

reached bag room unit (BRU) yet, still need to be sorted out for the scheduled flight.

This is a clear way of how a non-automated system leads to a mishandling. The bag

doesnt make it on the flight and passenger will be at the final destination without

their baggage. If this passenger is on a visit or business trip, staying in hotel then the

AA and AE airlines spend much more on his or her compensation, offer sometimes

more than the cost of airfare ticket which the passenger paid. Among the passenger

offer is a travel kit of tooth brash and other toiletry items costing about US $10.00

voucher to buy clothing (maximum $ 1,000.00). The lost bag still need to be

53
delivered to the passenger local address regardless of distance and the AA and AE

airlines spend between $ 10.00 to $ 80.00 per Baggage Delivery Order (BDO)35 to

deliver delayed bags to their owners addresses. AA and AE status passengers36

sometimes cost the airlines much more than the ordinary passengers. On average the

airlines spend approximately US $ 1,507.00 on each status passenger when they lose

their bags or get damaged, or pilferage.

4.1.1: Flight Delay Challenges in Baggage Handling

As always flight delays are never desired by passengers at all costs, but they are

unavoidable due to several conditions beyond an airlines immediate control, like

incremental weather, mechanical issues on aircrafts, late crew, flight diversions, and

security alerts and warnings. Flight delays undermine a lot of airlines operations and

leads to financial loss. In the airlines business, time is counted as money, because a

slight change in the operational schedule of flights leads to significant costs as a result

of delay. Flight delays leads to missing connections and failure to transfer bags, and

airport slot charges on top of normal landing fees charges. It is clear that flight delays

and incorrect routing of bags during the baggage handling process lead to enormous

35
A Baggage Delivery Order (BDO) is generated from the delayed baggage claim reported by
passenger in the AA and AE BSO. When a lost bag is located and arrives at the station where it is
required, BSO process the bags arrival information which includes the airline it came on, the flight
number, date, time, reason and any comment remark. Then delivery note automatically pops up to
generate the BDO receipt which has information about the delivery company name, passenger name
and address, file number, fare charge amount, pick up time and who picked bag for delivery to
passengers address. AA and AE pay per BDO, not per bag recovered. They have a policy of one BDO
to hold from one bag to maximum of five, all belonging to one passenger or passenger family on the
same address.
36
AA and AE status passengers are passengers who fly AA or AE frequently and accumulated flight
mileage which earn them status positions in the airlines cliental. Status positions are Gold, Platinum,
and Executive members. These are considered loyal passengers to these airlines and are treated
differently when they have any claim with the airlines.

54
problematic issues in airlines like AA and AE, when their passengers dont get their

check-in baggage at their final point of destination. Human errors are one of the main

causes of baggage incorrect routing. Incorrect baggage routing is a constant problem

at DCA with on average baggage mishandling of 13.25 bags per month (159 bags

incorrectly routed for 2010 over 12 months due to agent error). December 2010 was

the worsted month with 30 bags incorrectly tagged from DCA due to agent errors.

This led to baggage mishandling by AA and AE which consequently led to financial

loss in that year. This is one of the major areas that need improvements at DCA

operations.

4.1.2: TSA Baggage Mishandling

Congress mandated FAA to be the regulating body of the federal government

on airport security matters and formed TSA under the Department of Homeland

Security (DHS) to implement the airport security operations by 2001 after a terrorist

attack in New York, Pennsylvania, and Washington DC. TSAs enhancement of the

security measures in airports has reduced the rate of passengers clearance to the

boarding areas (sterile) and their bags, hence causing delays or sometimes missed

flight. The type of technology used at DCA to go through the TSA clearance is one of

the factors causing the delays or the missing connections or late transfers for

international flights.

DCA has additional security restrictions compared to other airports in USA just

for the fact that its within the nations capital with so many federal government

property around it. Washington DC has a 14- mile restriction of no-fly zone, a

justification for safe guarding the federal property. DCA airport is also very close to

55
the white house (the nations presidential home), another valuable federal government

asset which cant be overlooked. The fact that TSA has to screen all the bags one

hundred percent, both the carry-on and checked-in baggage, and then perform a

passenger bag match in some cases, leads to very slow process at DCA in clearing

both the passengers and the bags to boarding areas and baggage sortation for aircraft

loading by ramp baggage handlers.

Baggage mishandling occasionally happens at DCA due to TSA late clearance

before flight take-off the gate. According to AA baggage mishandled records, TSA

delayed on average 3.91 bags per month (47 bags mishandled by TSA in 2010 over

12 months) due to security concerns and this resulted in a shifted financial loss on the

AA airlines not TSA. October in 2010 was the worsted month, when TSA mishandled

11 bags.

Passengers usually safe guard their luggage by locking them with suit case

security code or locker before they check them in with airlines. Problems crow up

when TSA CT scan the baggage and it red flags for secondary and advanced

screenings37. When TSA has to run advanced screening, then it has to break locked

suit cases for TSA officers to physically check through these bags. If the bags are

cleared, then they are forwarded to BSO for rerouting to the passengers destinations.

Most of the times bags lose original flight when they are placed on secondary

screening and need get rerouted. At this point, these bags are mishandled because

they are not with the passenger at the time of destination. Secondly, the broken suit

37
A red flag for secondary and advanced screening is a situation when TSA places the bag in the CT
scanning machine for explosive screening detection. When the machine signals chances of explosives
or any other prohibited materials inside the bag, then it is rescreened again with another method which
is referred to as secondary screening, if suspicious materials available in the bag, then they are taken
into the lab for further screening and tests for compound identifications.

56
cases make passengers upset and at times they make claims that their bags were

vandalized and they needed compensation. AA and AE status passengers, end up

getting compensated with all their claims. This financial loss to the airlines may be

avoided if they educate the passengers about not locking their bags when travelling.

TSA secondary screening happens when TSA CT machines flagged for chances

of availability of prohibited contents like explosives being present in the bag, but

when it is rescreened or physically inspected quickly, they get cleared to dispatch on

any available flight. Usually TSA secondary screening doesnt take long and

therefore has less effect on the baggage missing the flight. However, sometimes for

late check-in passengers, it might be a big issue because passengers bags wont be

able to make it on the flight. The airline has to bear the financial cost in this regard

due to the mishandled baggage.

4.1.3: Effect of Passenger Trip on Baggage Mishandling

When a passenger checks-in for the flight from DCA, American Airlines (AA),

American Eagle (AE) or even any other airlines take responsibility of transporting the

passenger and their checked-in baggage from DCA to their final destination.

However, unlike the case for the passenger, baggage is handled by several groups of

people from the time the passenger checks-in the bag to end of the trip. In DCA, TSA

share responsibility to ensure baggage security is observed, local ground handling

companies like G2 Secure Staff (AA contractor) operate the baggage service for AA

and Action Courier (AC), (AA contractor) offer services of delivering delayed

baggage that are located to respective passenger addresses. Therefore, the presence of

the airlines stakeholders in the passengers trip consequently leads to a large number

57
of handover and limited visibility and information sharing in the baggage handling

chain. For that matter, it results in a large number of handovers involved in the check-

in location to AOA. Inefficiency or errors in any single handover can result in the

baggage not reaching the destinations with its owner [14].

4.1.4: Major Areas of Baggage Inefficiency

AA Codes are standard numbers given to all different AA and AE baggage

mishandling and are registered by International Air Transport Association (IATA).

We will use these codes in the table below with their brief statement. According to

the frequency of occurrence, the top ten codes are explained below for better

understanding of their meaning. The numbers in their corresponding periods of month

indicate the number of frequencies that code happened in that time. Corresponding

percentages were determined as well, as shown in the pie charts and tables below.

According Table 2, the most significant mishandled code is 50 (Damaged

Baggage). A passenger is reimbursed back when AA and AE damage their bags while

in transit. Damages like broken zipper, wheels and handles are not covered in the

airlines liability policy on domestic flights. Damaged bags took a biggest portion of

30 percent in 2010/11. The numbers increased by 50 percent from the previous period

of 2009/10. Most of the of these damages are likely to happen during the baggage

drop-off when they are extremely heavy, TSA screening officers may break the bag

for secondary inspection, poorly packed baggage break up during BRU sortation and

loading into ULD in the plane belly. Off-loading inbound bags requires ramp baggage

handling skills to avoid damages but at times it is inevitable. The last areas where the

58
baggage damages happen is when the ramp baggage handler drop-off baggage to

reclaim carousal or connecting bags to BRU.

AA code 93 is denoted as Reroute AA to AA and the description is baggage

mishandling that occurs when a passenger is rerouted on AA, but the checked bag is

not or cant be retagged with passengers new flights. Expedite tag or marked over on

the original tag are not considered retagging. Therefore, new tag must be placed on

the bag. How and where code 93 happens, is when a passenger uses ground

transportation to the final destination if flight delays or cancels on the final leg of the

passenger itinerary. Also when a passenger is voluntarily or involuntarily denied

boarding when his or her bag is already on board and bag doesnt get pulled off the

plane. Finally when AA cancels a flight and rebooks passenger on an OA with a

connection back to AA to the final destination and bag is not retagged by AA or OA

for the correct routing. This code 93 took the top (first) rank position in 2009/10 with

27 percent of all mishandled codes with December 2009 being the worst month in

both periods. This code 93 went down to its lowest in February 2011. Code 93 still

remained the biggest problem and was ranked second in 2010/11 with 19 percent.

AA code 5 is denoted with Failed to Load which means that baggage not

loaded by line cargo or failed to load locally checked baggage on an outbound flight.

Usually this problem is experienced in the BRU, outbound baggage loading, inbound

baggage off-loading and slightly during connecting baggage transfers. Failure to load

baggage on scheduled flights leads to baggage miss flights which was checked for

and may cause more flight delays to other cities. Code 5 was ranked second in

baggage mishandling for 2009/10 with 23 percent and ranked third with 14 percent in

59
2010/11. There was a considerable improvement of approximately 50 percent in

2010/11, although 2009/10 had both the highest number in December 2009 and the

lowest number in February 2010.

AA code 94 is denoted as Other Airline (OA) Upline Mishandling and it

refers to the mishandlings caused by another airlines error upline or in the city where

the passenger entered the AA and AE system. The OA error caused the bag not to be

available for transfer from the OA to AA and AE. This does not include bags that

were classified as late transfer OA to AA. Specific examples which causes code 94

are fail to load at an upline station by the OA; mis-load by the OA; mis-check by the

upline OA station; short-check by the upline OA station; off-load error by the OA;

and un-tag, and bag on-hand in an OA baggage service. Code 94 was ranked fourth

in both periods 2009/10 and 2010/11, However, 2010/11 did worse compared to

2009/10 because the number of mishandled baggage increased by 4 percent from 6

percent in 2009/10. The lowest number of mishandled baggage was in the month of

February 2010; only seven bags were mishandled compared to twenty eight in 2011

while December 2010 was the worst month in both periods.

AA Code 35 is denoted as Agent Mishandling or Bag check-in Error. It is

defined as mishandling caused by a passenger service agent at the ticket counter or

skycap at the curbside area. Scenarios that lead to this type of mishandlings are an

incorrect flight number on the bag tag; an incorrect destination on the bag tag;

embargo violations or incomplete information on the bag tag; failure to remove old

bag tag; baggage that is checked at the ticket counter after local cut-off time;

rerouting of a passenger and bags on a connection with less than the published

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connect time. All these errors made by the agent mounted up high in 2010/11 with

fifth rank while in 2009/10 agent mishandlings were in more than tenth position. The

agent mishandling jumped from two percent to six percent signifying an increase of

four percent and rank position moved down. The best month was January 2010 while

the worst month was December 2010. Generally the number of baggage mishandling

doubled signifying a lot of inefficiencies with agents at DCA.

AA Code 3 is denoted as Bag Not Transferred AA to AA Time Available or

Transfer Failure Online is defined as baggage not transferred between AA to AA,

and AE to AE; Code 3 does not apply to baggage transferred AA to AE. Most areas

where this problem may happen are in the BRU during baggage sortation, outbound

and inbound baggage loading at AOA. Code 3 was ranked sixth in 2010/11 with more

failures in baggage transfers by two percent from three percent in 2009/10; however

there has been a progressive improvement of twenty percent every month from

December 2010 to February 2011 compared to 3009/10 in the same period.

AA Code 13 is denoted as Bag Not Transferred AE to AA Time Unavailable

or Fail to Transfer AE to AA and is defined as bag not transferred between AE and

AA flights. This code is used on AA flights only and usually the BRU may receive

the bag later when a connecting flight is boarding and baggage loading is finalized.

Sometimes a transfer bag is on AE inbound flight connecting on an AA outbound

flight with a very tight connecting time. In 2009/10, the code 13 was ranked fifth

while 2010/11 it was ranked sixth which depict an improvement in the services by

three percent from six percent 2009/10. The months of period 2009/10, portray a

significant improvement of approximately ten percent every month from December

61
2009 to February 2010, but a considerable improvement of fifty percent was in the

period of 2010/11with a sharp drop in the number of mishandled transfers in January

and February 2011. The worst monthly performance in the two periods was

December 2009 followed by December 2010. Use of scanner technology might have

contributed in the improvement since there is better tracking information. BRU agents

are able to communicate better with ticket counter, BSO, AOA ramp baggage

handlers and knowledge of transfer baggage from OA. The total number of baggage

claim tracers dropped by approximately two hundred and rate of mishandled baggage

per one thousand passengers also improved.

AA Code 39 is referred to as Baggage Service Mishandling or BSO

Mishandling and is described as penalty charged by FAA to Airlines for failure to

follow procedures when creating passenger tracer claims in BSO. Code is charged in

monetary value of thirty- five dollars per tracer claim opened by BSO with errors.

Failure to follow the following procedure lead to code 39: Tracer created in wrong

passenger name locator file, wrong city, or when it should not have been created.

Opening tracers with wrong airline bag tag and wrong passenger itinerary segments

also leads to code 39 charges. This code took a better eighth rank position in the

period of 2010/11 from the sixth rank in 2009/10 with great improvements of three

percent from five percent. BSO numbers of mishandled tracers have dropped

significantly from the twelve to three tracers in two months of January and February

2011.BSO services improved by fifty percent from the period of 2009/10 and

2010/11. The improvement in the services could have been caused from the better

62
communications with ramp handlers, BRU agents and ticket counter agents as well as

better provision of baggage information in the Baggage Management System (BMS).

The other last ten AA codes in the table are 41, 1, 51, 61, 8, 6, 40, 88, 80, and

81together contributed to twenty- one percent of baggage mishandled in 2009/10 and

considerably dropped to eight percent in 2010/11. We think this is a very great

achievement by AA and AE baggage operations at DCA. There is improvement of

thirteen percent between the two periods. Overall passenger image towards AA/AE

have improved because of improved services like few lose their bags, baggage show

up on the carousal within expected standard time (less than twelve minutes after flight

arrival). However DCA station is still performing very poorly in code 50 (damage

baggage) and code 93 (Reroute AA to AA).

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AA Mishandling Code Time Period Before Use of Scanner 2009/10 Time Period After Use of Scanner 2010/11

Code DEC. 09 JAN. 10 FEB. 10 TOTAL % DEC. 10 JAN. 11 FEB. 11 TOTAL %

50 Damage Baggage 35 53 31 119 12% 82 88 80 250 30%

93 Reroute AA to AA 187 46 38 271 27% 79 55 30 164 19%
5 Failed to Load 196 35 14 231 23% 69 18 33 120 14%
94 OA Upline Mishandling 27 31 7 65 6% 35 21 28 84 10%
35 Agent Mishandling 15 2 8 25 2% 30 7 14 51 6%

3 Bag not Transferred AA -AA Time Available 7 16 7 30 3% 18 14 8 40 5%

13 Bag Not Transferred AE - AA Time Unavailable 28 16 13 57 6% 19 5 5 29 3%

39 Baggage Service Mishandling 22 14 11 47 5% 6 12 3 21 2%

41 Gate Bag Mishandling 6 9 9 24 2% 13 3 2 18 2%

1 Bag Available not Transferred OA -AA 5 2 3 10 1% 8 1 7 16 2%

51 Pilferage 5 4 4 13 1% 8 6 1 15 2%
61 Bag Switch on Delivery 2 4 0 6 1% 6 2 2 10 1%
8 Baggage Misload by Line Cargo 12 7 8 27 3% 4 3 2 9 1%
6 Unload Error/ Override 15 4 1 20 2% 2 0 5 7 1%

40 Security Mishandling 5 3 2 10 1% 4 0 2 6 1%
88 Baggage System Problems 0 13 0 13 1% 0 4 0 4 0%
80 Tag Off 1 0 1 2 0% 1 0 0 1 0%

81 Cube Out/Weight and Balance 20 0 0 20 2% 0 0 0 0 0%

TOTAL CLAIM 588 259 259 1004 384 239 226 845

BAGS MISHANDLED PER 1000 PASSENGERS 6.4 3.4 2.5 3.8 2.95 2.77

Table 2: Three Months Baggage Mishandling Frequencies

64
 Subsection
Subsection 2

Figure 10: Pie chart of Baggage Mishandled in Dec-Feb. 2009/1

2009/2010

MISHANDLING TYPE CODE RANK DROP TICKET TSA TSA ADVANCED BAG-ROOM OUTBOUND BSO-BAG BSO-D/D INBOUND CONNECT INBOUND
OFF COUNTER SCREENING SCREENING SORTATION BAG LOADING ROUTING CLAIM BAG OFF LOAD BAGGAGE BAG CLAIM

Reroute AA to AA 93 1 x x x x x x

Failed to Load 5 2 x x x x

Damaged Baggage 50 3 x x x x x x x x

OA Upline Mishandled 94 4 x x x x x
Bag not transferred AE-AA 13 5 x x x x
Time Unavailable

BSO Mishandling 39 6 x x

Others 7 x x x x x x x x x x x

Table 3: Baggage Handling Process Map Based on Mishandling Types in 2009/10

65
Table 4 and Figure 11, show the top ranked baggage mishandled codes in percentages

and pie chart for the 2009/10 period.

Table 4: Most AA/AE Baggage Mishandled Codes in 2009/10

Figure 11: Top Ranked AA/AE Baggage Mishandled Codes in 2009/10

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 2010/2011
MISHANDLING TYPE CODE RANK DROP TICKET TSA TSA ADVANCED BAG-ROOM OUTBOUND BSO-BAG BSO-D/D INBOUND CONNECT INBOUND
OFF COUNTER SCREENING SCREENING SORTATION BAG LOADING ROUTING CLAIM BAG OFF LOAD BAGGAGE BAG CLAIM

Damaged Baggage 50 1 x x x x x x x x

Reroute AA to AA 93 2 x x x x x x

Failed to Load 5 3 x x x x

OA Upline Mishandled 94 4 x x x x

Agent Mishandling 35 5 x x
Bag not transferred AA-AA 3 6 x x x x
Time Available
Bag not transferred AE-AA 13 7 x x x x
Time Unavailable

BSO Mishandling 39 8 x x

Gate Bag Mishandling 41 9 x x

Others 10 x x x x x x x x x x x

Table 5: Baggage Handling Process Map Based on Mishandling Types in 2010/11

Figure 12: Pie chart of all the Baggage Mishandled in Dec-Feb. 20010/11

67
 Table 6: Most AA/AE Baggage Mishandled Codes in 2010/11

Figure 13: Top Ranked AA/AE Baggage Mishandled Codes in 2009/10

68
4.2: Technology Investment

AA and AE in DCA perform baggage handling operations with the help of

different kinds of technologies in place. The EDS and ETD machines used in

managing baggage security help with safety travel of baggage from place of origin to

final destination. When passengers checked-in baggage is dropped off to TSA

checkpoint, EDS and ETD-CT scanners are used to perform screening of the baggage.

After the scans, baggage is dropped again onto AA and AE conveyor belts which

send the baggage to the BRU sortation area commonly known as make-up area where

baggage is graded and placed on carts for aircraft loading in the AOA. Before

baggage is loaded onto the aircraft, scanner machines are used for tracking baggage in

transit and help AA and AE to have accountability and precise track records for the

whereabouts of baggage. AA and AE use handheld scanner called RampLink and

BagLink to scan baggage to capture data and send it to the BMS network for further

purposes. BSO uses the BagFinder system to capture and also display data for the

scanned bag tag information on the flight. The use of hand-held scanner machines has

an effect on the cost in the baggage handling and also the mishandling of baggage.

AA and AE in DCA have just started using the baggage scanning technology in

December 1, 2010, and we are going analyze from the available three months data of

December 2010, January and February 2011 for any useful impacts. Before the use of

scanners at DCA, they have been a problem of delayed bags, baggage miss-load,

misconnections or even transfer bags not getting on the scheduled flight. Generally

incorrect baggage sortation, transfer bags ending up on a wrong flight or in local

69
bags, or unload through bags38 by mistake and mix them with local arriving bags

are common errors encountered before AA and AE use the baggage scanning

technology. All these mistakes in baggage handling lead to financial costs incurred

by AA and AE as direct result from the baggage handling.

4.2.1: The Role of Scanners in Baggage Processing

Handheld scanners reduce the number of human errors from mixing transfer

bags into local bags or loading them onto wrong flights by recording the entire

loading process. After the baggage scanning system has performed the recording of

all baggage loaded on the aircraft, it notifies the loader if there is miss-loaded

baggage on the aircraft before the flight takes-off. This kind of tracking systems

prevents wrong baggage loading on wrong aircrafts destinations, hence controlling

down the number of baggage mishandling. In DCA, AA lost approximately 4 bags

every 1000 passengers who flew on AA for the year 2010 and approximately 6 bags

were lost every 1000 passengers in 2009. There were significant improvements in the

services by 20% probably due to better communications between the ticket counter

agents, BSO, ramp baggage handlers and bag room unit agents during baggage

operations. However, AA opened 348,300 baggage tracers for lost passenger baggage

in 2010, and 382,500 baggage tracers in 2009. It is estimated that airlines loses US

$100.00 on every baggage tracer opened, so if we use this figure as our estimated cost

value per tracer, then AA spent US $ 34,830,000.00 baggage mishandled in 2010 and

US $ 38,250,000.00 baggage tracers in 2009. AA saved over US $ 3.4 million from

2009 to 2010 alone due to the improved services in baggage handling. AA had an
38
A through bag is a bag which is supposed to stay on the aircraft hold and only be unloaded at the
next destination.

70
intangible benefit of happier passengers since fewer passengers lost their bags and

could have led to an increase of 22,500 passengers that flew AA in 2010 from DCA.

{(total passengers in 2010 is 1,191,100 minus total passengers in 2009 is 1,168,600)

= 22,500 passengers}

Another intangible benefit could have been the less stress for BSO employees who

face and directly encounter with the upset passengers who lost baggage. The fact that

less baggage tracer claims were opened means that less passengers came to BSO for

claim opening. This enables BSO agents to focus on other baggage handling

procedures for better services than spending lots of time settling passenger claims.

With the use of scanners, it is now possible for BSO to use BagFinder home

page interface to search in the system and be able to track and know where the

baggage is located to direct or communicate instructions as per need. Figures 14 and

15 illustrate BagFinder interface with a red arrow showing the new functionality to

display all scanned data. It is quicker for BSO agents to locate baggage when it is lost

and applies accountability to who handled the baggage last before getting lost or

mishandled. Human errors are also greatly minimized.

71
Source: American Airlines

Figure 14: Screen Shot Displaying a Search Option on BagFinder Home Page

Source: American Airlines

Figure 15: BagFinder Bag Scan Data Captured by Hand-Held Scanners

72
In the above screen shot, BSO agent is able to know how many bags a passenger

checked-in, on what flight, stations where bag was scanned, bag status (scanned or

not scanned), time and date when it was scanned, final destination of bag, and where

bag was loaded on the plane containers (Unit load devices).

Source: American Airlines

Figure 16: Illustration of Complete Bag Scan Data

In Figure 16, the detailed bag scan data gives BSO agents and Ramp Baggage

Handlers better visibility of any bag loaded on the plane. The set of information we

can access in BagFinder from the bag check-in, bag routing, bag scan data, to

passenger and bag itinerary allows us perform a complete a trace and tracking of any

bag if it is lost.

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 4.2.2: Bar-Code Baggage Scanning Inefficiencies

A handheld scanning machine reads only the bar-coded baggage tags

generated from airlines printers or expedited tags. It becomes impossible for the

scanning machine to capture data through the bar-code if the tag bar-code areas are

damaged, baggage missed connection, or even when flight cancelled. Therefore, this

is when rerouting of baggage with current flight information is done by a baggage

service agent in BSO and new expedite tag is placed onto the baggage. This is the

only portion where handheld scanners cant function on its own and manual updates

have to be performed by agents. Sometimes it leads to increased chance of baggage

getting lost or delayed in reaching the destination due to inability for the scanner to

read bar-code information. But if the mismanagement of baggage is handled on time,

then mishandling could be avoided.

4.2.3: Bar-Code Technology Limitations

The bar-code technology cant perform miracles to expedite the off-loading of

bags belonging to no-show39 passengers and also this technology cant even

identify bags that need a very quick transfer to a connecting flight. The reason for the

inefficiency is that bar-code technology does not provide any information on the

location of each bag in an arriving aircraft or even its current available connecting

time. [14] For this matter, there are several chances that bags can miss connect due to

human errors or bags getting miss-loaded. When baggage misconnect or get miss-

loaded, it leads to more airlines spend more in tracing the baggage and still have to

39
No-Show passenger is the one who already booked paid ticket and check-in but does not show up
at the gate during the boarding time of the flight on schedule.

74
deliver it to passenger home address, not mentioning the compensation that might be

offered to the passenger with the lost baggage. Usually lost bags take few hours to 2

days getting located and sent to the owner. AA and AE spends minimum of US

$15.00 and maximum of US $ 3000.00 per tracer opened which could include one or

a total of lost, delayed, damaged or pilferage. In 2010, AA opened 966 damaged

baggage files in DCA and 530 damaged baggage files in 2009, the figures show a

very poor job in terms of minimizing damages of passenger baggage. The number of

damaged baggage almost doubled in 2010, an indicator of poor ramp baggage

handling services in AA stations. If we use the average cost of US $ 100.00 for

mishandled bags worldwide, then AA total spent on damaged baggage is US $ 96,600

in 2010 and US $ 53,000 in 2009, an increase of US $ 43,600.00 on damaged

baggage than the previous year.

As shown in appendix II, in terms of pilferages, DCA created 107 files in 2010

while in 2009 there were only 63 files created. Again AA performance is very bad in

taking care of passengers items or contents inside the baggage. AA filed 44 more

cases from passengers with lost contents from their baggage compared to 2009 which

filed 63 pilferage files.

The severe snow storm in 2010 which caused cancellation of many flights in

January to March, led to many baggage misconnection and over flow of baggage at

other AA stations. Passenger bags were destroyed, and some lost tags. The pattern

conditions seemed to be different from 2009 and 2010. However, in 2010, AA spent

more in settling the damage claims in the summer season more than any other

mishandling type with June and August taking the highest toll of 105 and 102

75
respectively. The figures were very low in 2009 for the June and August month with

35 and 48 files. This means that AA has to really try to improve conditions in how to

handle passengers baggage and also probably need to retain ramp handlers in

technique of minimizing damaged baggage. Probably the I dont care stand may

clear off the agents minds and offer good services (treat passenger bags with

concern) to passengers and the airlines in general.

4.3: Regression Analysis to Quantify the Effect of Major Efficiency Factors

4.3.1: Operational Mode of AA and AE in DCA

AA operates as a Major Airline Network (MAN) while its sister carrier AE

operates as a Regional Airline (RA) in USA. As stated in the previous chapters,

different airlines use different mode of operation and the operational mode contribute

to the extent of how baggage is handled. For example baggage managed by MAN

uses a Hub-and-Spoke system40 and offers more intricate baggage handling

challenges like managing Connecting Bags (CB), Misconnected Bags (MCB) and

Transfer Bags (TB) bags compared to Regional41 and Point-to-Point system42. Table 7

below demonstrates AA and AE airlines business at DCA by showing the airline

group, airline name, the operational market areas, routing types, passenger classes on

40
Hub-and-Spoke system is used by MAN where all connections are channeled through their hub.
41
Regional system is where a regional airline is serving specified regional are usually short routes.
42
Point-to-Point system is a national airlines type of system usually known as Low-Cost Airlines
(LCA) mainly with no hub system for both long and short routes example is Southwest airlines.

76
the routes and airlines hub. X in the table shows presence of those classes on the

aircraft and dash (-) represents no presences.

Airline Airline Market Area Route Passenger Category Hub

Group Code Large Small Type First Business Economy City
City City Class Class Class
Hub- AA DFW, STL Long X X X DFW,
and- ORD, ORD
Spoke MIA,
Point-to- - - - - - - - -
Point
Regional AE JFK, BNA, Short X - X -
ORD RDU

Table 7: AA and AE Business Operational Mode at DCA

In hub-and-spoke system, bags have greater chances of missing connecting

flights because they have to transfer to a connecting flight from the hub which is

usually different from the previous flight. Under this system baggage handling

management have to be efficient, otherwise transfer bags may fail to connect on the

same flight with the passenger. If it fails, then a baggage mishandling start to exist, so

the efficiency at the hub (example AA in DFW & ORD) is very important and helps

in reducing the baggage mishandling claims they would open every day.

AA and AE in DCA operate in seven Cities (Stations) every day, and these

stations are DFW, ORD, MIA, STL, JFK, BNA and RDU. The illustration in Figure

17 is a pictorial design demonstrating the air routes connections between DCA and

those cities. The small circles represent the cities or stations, and the two-way arrows

represent the air plane routes direction. The difference in the circle shades emphasizes

if a city is Hub or not Hub, while the two-way arrows indicates directions of baggage

volume flows (Direct, connecting and connecting transfer bags) to DCA. The dash-

77
dotted lines in red color show the flight segments and routes between cities. See

classification table 8. If a baggage route is LAX-ORD-DCA-STL

Figure 17: DCA Market Operational Areas

Then, it implies that LAX ORD DCA is connecting flight baggage (CF) through

ORD to DCA or connecting from any of the seven cities to DCA. From ORD DCA

is a direct flight baggage (DF) from ORD to DCA. LAX ORD DCA STL or

ORD DCA STL are direct connecting transfer baggage (DCT) making connection

in DCA from ORD or any of the seven cities as DF or LAX as CF to STL or

anywhere (OA, DFW, MIA, RDU, JFK, BNA).

In this analysis we consider both inbound and outbound bags flowing into and

out of DCA from other stations. All these seven stations use hand-held scanners at

their stations and perform scans on all the baggage that is transported from their

station to DCA. We are trying to carry out a test, on the use of baggage scanners at all

the seven stations feeding DCA with baggage from their cities to discover if there are

effects on baggage handling services and end benefits.

78
 4.3.2: Categories of Baggage Flow and their Volumes

Data is collected for all seven stations, and bags are classified into three

different categories: Direct Flight (DF) Bags43, Connecting Flight (CF) Bags44, and

Direct Connecting Transfer (DCT) Bags45. Incoming baggage volume (IBV) include

all bags flowing to DCA as their final destination from a direct flight (DF); and those

from the connecting flights (CF) to DCA; plus all bags flowing to DCA as transfer

(DCT) bags to other flight of AA, AE or OA.

Equation generated for the total volume of incoming Baggage from all stations

to DCA. This computation will lead us to knowing all DF, CF, and DCT bags from

all station separately as well as a total baggage from each station. See data from table

in appendix IV and V for stations before scanning baggage and after scanning

baggage.

43
Direct Flight (DF) Bags are considered the direct flight baggage from any of the seven stations
(DFW, ORD, MIA, JFK, BNA, RDU and STL) as their originating city to DCA.
44
Connecting Flight (CF) Bags are connecting flight baggage which originated from another city and
made a connection through any seven AA and AE direct stations.
45
Direct Connecting Transfer (DCT) Bags are considered the baggage from any station connecting
through DCA to another station.

79
Classification Original Transfer Destination Illustrating
Of Route City City City Example

DF One of Seven DCA

CF Anywhere One of Seven DCA

DCT Anywhere DCA Anywhere

Table 8: Classification of Baggage Routes

DF baggage is considered to be those bags with their origin as (example ORD)

and directly going to DCA as its end point (final destination). The passenger did not

have any connection before or even after DCA. Therefore, the perfect service of ORD

station by scanning and loading the bags on the right flight with the passenger will

affect DCA station indirectly. Their (ORD) efficiency improves the quality of

services in DCA when passenger receives the bag on the same flight he or she flew on

and it creates no baggage mishandling, hence customer satisfaction can be improved,

and employee in baggage get to save time for other valuable services to customers.

The use of baggage scanners at ORD become another area of vital importance to both

ORD and mostly DCA because the services in baggage handling management are

improved and the station saves money spent on mishandled baggage.

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 If a bag originated from LAX, made connection through AA hub in ORD on

an American flight to its final destination in DCA, then this bag is considered a

connecting flight bag and it is known to be local bag, because this is its end point

on flight travel. Therefore, baggage handling services at ORD station affects DCA

station indirectly because their efficiency in transferring this bag on the right flight at

right time improves the quality of service and passenger get bag right on the same

flight he or she used to the final destination. If ORD doesnt perform a good service

in transferring this bag on a right flight tagged for to DCA, then passenger at DCA

wont have any bag and DCA will have to open a tracer (baggage claim) for this lost

bag. This is where technology has improved the services through using handheld

baggage scanners on all bags loaded on the planes to give the visibility of the baggage

flow from station to station.

If a bag originated from ORD is making its connection through DCA to STL, it

is considered DCA transfer bag, therefore it doesnt affect DCA station directly since

the passenger does not end his or her trip in DCA, but continues to STL as the final

destination. The use of baggage scanner technology at ORD does not directly affect

DCA station because this bag is still in transit to STL. However, STL will be affected

by the ORD inconsistence. Our concern in this research is to realize DCAs changes

in the baggage handling results after using the scanners. According to available data

before and after using the scanner technology, the significance levels are explained in

the regression results below. The analysis was carried out using SAS software.

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 4.3.3: Baggage Flow Mapping with Baggage Mishandling

Considering the period between December 2010, and March 2011, Damaged

Baggage (code50), Rerouting AA to AA (code93) and Failed to Load (code5) were

the most significant mishandled baggage issues with 28%, 20% and 15%

respectively. We mapped the major baggage problems with traffic flow data in Table

9 below. We used the data in the traffic summary table presented in appendix IV,

which was obtained from AA to come up with the hypothesis and determine the

regression analysis results using SAS software. The results from the data are

explained in the specified model below. We considered three main models: Code 50

referred to as Damaged Baggage, Code 93 referred to as Rerouting from AA to

AA and Code 5 referred to as Failed to Load. In reality, all AA and AE baggage

flows from all the seven cities or station are not differentiated. The same system

handles all the baggage.

MISHANDLING Code DF CF DCT TOT Unusual

Damaged Baggage 50
Rerouting AA to AA 93
Failed to Load 5
Table 9: DCA Baggage Flow Mapping with Mishandling Codes 50, 93 and 5

In Table 9, DF is referred to as Direct Flight baggage which means all

inbound baggage from one city to DCA as its final destination without any

connection before and after DCA. CF is referred to as Connecting Flight baggage

meaning all inbound baggage which had a connection from their previous cities

before coming to DCA as their final destination. DCT refers to Direct Connecting

Transfers meaning that all inbound baggage connecting through DCA. TOT refers to

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Total Outbound Transfer meaning all baggage that is checked-in DCA for

outbound flights (TOT=Outbound Total minus Sum of Inbound DCT). Unusual

refers to unexpected performance meaning all unexpected events that happen during

the flight operations between cities or stations leading to flight cancellations after

long tarmac delays due to bad weather in DCA or any other DCA gateway cities.

Since passengers would claim damaged baggage at destination, only DF and CF

traffic flow affect the number of damaged baggage.

Because rerouting AA to AA refers to the failure of transferring baggage

between AA planes, only DCT traffic flow matters. Both DF and CF have final

destination at DCA. They dont have any effect on the failure to transfer baggage at

DCA. The total outbound traffic originates from DCA. So TOT does not affect the

failure to transfer baggage at DCA. In terms of failure to load, both DCT and TOT

traffic would have an effect. This is because these two types of baggage need to be

loaded on a plane at DCA.

We considered DFW, ORD and MIA as hub airports and treated others as

Non-hubs. Non-hubs are referred to as JFK, STL, BNA, RDU airports and these

stations were categorized as non-hubs because of their low volume baggage traffic

flowing to DCA. Mark X in Table 9 means NO EFFECT and check mark means

THERE IS AN EFFECT by the corresponding code or mishandling. Corresponding

regression models were developed and tested in the following sections.

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4.4: Data Analysis

4.4.1: Effects of AA and AE Baggage Flows on Total Mishandled Bags

We first look at AA and AE baggage flow data and identify its effect on the

total mishandled bags.

Our regression model is:

MishandledBags = a0 + a1 Weekday + a2 Scanner + a3 Unusual + a4 AA_DF + a5

AE_DF + a6 AA_CF + a7 AE_CF + a8 AA_DCT + a9 AE_DCT + a10 AA_TOT + a11

AE_TOT

Parameter Estimate Standard t Value Pr>|t|

Error

Intercept a0 = -12.3 7.43 -1.65 0.11

Weekday a1 = 0.39 1.30 0.30 0.77

Scanner a2 = -1.30 1.61 -0.81 0.42

Unusual a3 = 13.1 1.78 7.38 < 0.0001

AA_DF a4 = 2.362 0.004 0.61 0.54

AE_DF a5 = -5.491 0.005 -1.03 0.31

AA_CF a6 = -0.737 0.003 -0.22 0.83

AE_CF a7 = 2.879 0.011 0.27 0.79

AA_DCT a8 = 8.690 0.024 0.37 0.71

AE_DCT a9= -16.035 0.051 -0.32 0.75

AA_TOT a10 = 7.705 0.003 2.33 0.024

AE_TOT a11= 26.094 0.012 2.22 0.03

Table 10: Mishandled baggage parameters in the regression model (per 1,000 bags)

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 The R-square is 0.64 implying 64% of the data variation is explained by the

model. The mean value of mishandled baggage is 11.4 which imply that the airline at

DCA is likely to spend on average US $ 1,100 daily on mishandled bags on every

1,000 increase of bags.

The coefficient for variable Weekday is 0.389, meaning that baggage

transported in weekdays is more likely to be mishandled than those transported in

weekends. On average, there is an increase of 0.4 mishandled bags per 1000 baggage.

The coefficient for variable Scanner is -1.297, but the p-value 0.42 is

insignificant at 0.05 level. It shows that the use of scanner technology has the

potential to reduce the likelihood of baggage being mishandled. But the effect is not

significant.

The coefficient for variable Scanner is 13.11, significant at 0.001 level.

Therefore, the effect of unusual events such as flight delay and cancellation on the

total number of mishandled bags is significant. Occurrence of an unusual event on

average will lead to 13 bags per 1000 bags being mishandled.

Comparing coefficients for AA_DF and AE_DF imply that an increase of 1000

AA_DF bags will lead to an increase of 2 bags being mishandled. In contrast, if the

1000 DF bags come from AE, the total number of mishandled bags can be reduced by

5.

Comparing coefficients for AA_CF and AE_CF imply that an increase of 1000

AA_CF bags will lead to a decrease of 1 bags being mishandled. In contrast, an

increase of 1000 of AE_CF bags will lead to an increase of 3 bags being mishandled.

85
 Comparing coefficients for AA_DCT and AE_DCT we see that, an increase of

1000 AA_DCT bags will lead to an increase of 9 bags being mishandled. In contrast,

if the 1000 DCT bags come from AE, the total number of mishandled bags can be

reduced by 16.

Coefficients for AA_TOT and AE_TOT show that both AA and AE baggage

flowing out of DCA contribute significantly to the total number of mishandled bags.

An increase of 1000 AA or AE outbound traffic will on average increase the total

mishandled bags by 8 or 26, respectively. The following observations were identified:

x Observation 1: Scanners use has a positive effect on improving baggage

mishandling, though the effect is insignificant. Probably use of scanner

technology at different tracking point like ticket counter, TSA check-point,

BRU, and AOA at the DCA airport might make results more favorable due to

more baggage handling visibility.

x Observation 2: Unusual events such as flight cancellation, late crew, plane

mechanical issues, bad weather, security alerts are more likely to be

experienced at least daily and if such event occur, AA is likely to mishandle

13 bags on every 1000 bags (US $ 1,300.00).

x Observation 3: Total outbound baggage traffic for both AA and AE

significantly contribute to number of mishandled baggage daily at DCA. For

every 1,000 baggage traffic increase leads to 8 bags of AA and 26 bags of AE

being mishandled daily. The total cost come to US $ 3,400.00 daily. This

shows that DCAs performance in transferring bags is really not good.

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 x Observation 4: AA direct flight bags seem not to be performing well.

Probably problems could be originating from AA operational cities (STL,

ORD, DFW, MIA) which are hubs or big cities where transferring baggage is

a challenge due to high baggage traffic. AE is also not performing well with

transferring baggage on connecting flights through cities like BNA, RDU,

JFK and ORD. The reason could be that AE being a RA, most of its flights are

controlled by AA which is MAN. AA could be forcing AE to re-schedule

flights or delays flights while waiting for late passengers who might be

connecting through AA hubs.

x Comparing Tables 9 and 11 we can summarize our insights as follows:

x A bag coming from AA_DF and AE_CF will more likely be

mishandled. This is probably due to damage.

x A bag coming from AA_DCT will more likely be mishandled. This is

probably due to rerouting or failed to load.

x Outbound traffic from both AA and AE contribute significantly to the

mishandled bags. This is probably due to failed to load.

4.4.2: Effects of Baggage Flows in Different Stations on Mishandling

In this section, we take a further look at the detailed baggage flow data in the

seven stations. We focus on the top three reasons for baggage mishandling. The

General Linear Model (GLM) developed explains the output from the collected

baggage flow data for 62 days. The dependent variables in our GLM models are the

number of mishandled bags due to mishandling Code50, Code93 and Code5. Since

87
the volume of baggage flows in weekdays differ from that at weekends, we use

Weekday as a dummy variable. We also use Scanner as a dummy variable to

distinguish the data we collected before and after scanner technology were

implemented.

4.4.3: Code 50 - Damaged Bags

Since heavy traffic would likely increase the number of damaged bags, we

separate the high volume, hub airports from the small traffic, non-hub airports. Since

scanner use does not seem to affect the damage, we do not incorporate the Scanner

dummy variable in the model. Direct flight baggage (DF) from big cities like MIA,

DFW and ORD (usually Hub cities) contribute to the problem of damaged bags,

although all non-hub cities have low baggage volume but they contribute to the

problem and it was considered in this regression, Connecting flight baggage (CF)from

big cities or hubs and non-hubs contribute heavily to this problem because bags have

several change of hands which subject these bags to a higher damage risk, and

unusual events which could lead to flight cancellation and baggage rerouting through

other cities were considered and included in this model. Direct connecting transfer

baggage (DCT) wasnt included in this model because transfer bags do not affect

DCA station, these bags are still in transit, Total Outbound Transfer baggage (TOT)

does not affect DCA as well because this is their original city and if any damage

happens it will charged to its final city therefore TOT was not included in this data

set.

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The regression model is:

Damaged Bags = a0 + a1 Weekday + b1 MIA_DF + b2 DFW_DF + b3 ORD_DF + b4

NonHubDF + c1 MIA_CF + c2 DFW_CF + c3 ORD_CF + c4 NonHubCF + d1

Unusual;

Parameter Estimate Standard t Value Pr>|t|

Error

Intercept a0 = -1.49 1.62 -0.92 0.36

Weekday a1 = 0.20 0.53 0.37 0.71

MIA_DF b1 = 0.01 0.003 1.63 0.11

DFW_DF b2 = -0.004 0.003 -1.51 0.14

ORD_DF b3 = 0.01 0.003 2.61 0.01

NonHubDF b4 = -0.004 0.003 -1.44 0.16

MIA_CF c1 = 0.01 0.002 3.79 0

DFW_CF c2 = 0.004 0.003 1.46 0.15

ORD_CF c3 = -0.007 0.005 -1.31 0.20

NonHubCF c4 = -0.001 0.001 -0.58 0.56

Unusual d1 = 8.58 1.76 4.87 0

Table 11: Damaged Baggage Parameters in the Regression Model

The R-square is 0.50 implying 50% of the data variation is explained by the model.

The mean number of daily damaged bags is 2.94. The AA has to pay back or repair

approximately 3 (three) bags daily as damaged baggage before returning them to

89
owners (passengers). The average standard cost of the mishandled baggage is US $

100.00, therefore 3bags times $ 100.00 will give a daily cost of US $ 300.00.

The following observations were identified from the regression results:

x Observation 1: The ORD_DF contributed significantly to the baggage

damage at the 0.05 level. It seems that ORD has huge baggage traffic flowing

to DCA and mostly direct flight baggage from ORD to DCA affect DCA

station cost wise when ORD has a poor performance as a hub compared to

MIA and DFW in damage baggage contribution percentages on direct flights

baggage.

x Observation 2: The MIA_CF contributed significantly to the baggage damage

at the 0.05 level. It is clear that connecting baggage in MIA from other

stations to DCA contribute to the mishandling effect tremendously. MIA also

being a hub airport, the problem of baggage changing several airlines and

chances of transit damage is very high. According the results, DFW and ORD

and the non-hub stations (RDU, STL, BNA, JFK) performs better than MIA.

Therefore, MIA domestic and international passengers connecting through

MIA to DCA costs AA more money in terms of baggage repairs and

compensation to the passengers than any other station

x Observation 3: The unusual events like abrupt flight cancellations and

extended tarmac flight delays at these seven airports due to bad weather, snow

storms, plane mechanical conditions and routine flight crew employees

delays all contributed significantly to the baggage damage. On average, there

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 is an increase of 8.6 damaged bags if such event occurs. This contributes

approximately US $ 900.00 towards the airlines lose if it happens.

{(8.6 damaged bags * $ 100.00 cost per bag) = $ 860.00}

x Observation 4: The pre-regression test for small traffic airports (NonHubDF)

shows minimal influence of their traffic flow on the total number of

mishandled bags due to damage. Pre-testing of the data indicates that traffic

volume is a major factor highly correlated with damaged bags.

4.4.4: Code 93 - Rerouting AA to AA

The volumes of traffic of all bags flowing through all eight airports contribute

to the problem of baggage transfer failure through different cities. For this reason,

baggage on direct flights to DCA as final destination has no effect and was excluded

in the model, baggage Connecting through other cities before coming to DCA as final

destination do not have any effect on the failure to transfer baggage, therefore that

parameter wasnt necessary to be inclusive in the model, however, all baggage from

the seven stations having their transfer city as DCA was included because the failure

of transferring all transfer baggage lead to the rerouting problem of transfer failure.

Unusual events like incremental weather, mechanical issues on planes, unusual

security screening may contribute to flight delays or cancellation and even isolation

of planes, hence leading to plane, flight and baggage disruption and interruption of its

normal course. These kinds of events occur some times and were included in the

regression model to take care of the conditions. All baggage originating from DCA to

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other cities does not directly contribute to the problem of failure to reroute AA to AA

and therefore, it wasnt included in the model.

The regression model is:

Rerouting from AA to AA = a0 + a1 Weekday + b1 Scanner + c1 MIA_DCT+ c2

DFW_DCT + c3 JFK_DCT + c4 BNA_DCT + c5 RDU_DCT + c6 STL_DCT + c7

ORD_DCT + d1 Unusual

Parameter Estimate Standard t Value Pr>|t|

Error

Intercept a0 = 1.25 1.05 1.19 0.24

Weekday a1 = -0.55 0.78 -0.71 0.48

Scanner b1 = -0.09 0.77 -0.11 0.91

MIA_DCT c1 = -0.01 0.01 -0.60 0.55

DFW_DCT c2 = 0.001 0.08 0.02 0.98

JFK_DCT c3 = 0.15 0.06 2.40 0.02

BNA_DCT c4 = 0.23 0.12 1.82 0.08

RDU_DCT c5 = -0.02 0.04 -0.41 0.69

STL_DCT c6 = -0.15 0.11 -1.30 0.20

ORD_DCT c7 = -0.02 0.05 -0.44 0.56

Unusual d1 = 14.24 1.95 7.32 0

Table 12: Effects of Baggage Flows on rerouting AA to AA

The R-square is 0.57 implying 57% of the data variation is explained by the

model and the mean daily mishandled bags due to rerouting from AA to AA is 2.27.

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The following observations were identified and interpreted from the regression

results:

x Observation 1: The scanner use seems decreasing the daily number of

mishandled bags by 0.09. That is a 0.09/2.27 = 4% improvement. That means

the use of scanner can reduce 4% of mishandled bags due to rerouting.

However, the effect is not significant at 0.05 level. The scanner use doesnt

directly have a great influence on all direct connecting transfer (DCT) bags

connecting through DCA.

x Observation 2: It seems that AE traffic from JFK and BNA contributed

significantly (at the 0.05 and 0.1 levels, respectively) to mishandled bags due

to rerouting form AA to AA. JFK transfer bags through DCA contribute to the

depth of the problem more than MIA, DFW, BNA, RDU, and STL.

x Observation 3: Unusual events such as flight cancellations contributed

significantly to mishandled bags due to rerouting from AA to AA. On

average, there will be an increase of 14.24 mishandled bags if such an event

occurs. Approximately US $ 1,400.00 lost from the airline.

4.4.5: Code 5 - Failed to Load

We excluded all baggage from direct flights to DCA and baggage that

connected through other cities before DCA as final destination because they did not

directly affect the failure to load bags on the plane. Probably other factors such as late

baggage check-in, or TSA baggage security hold might have contributed more to the

failure to load baggage on the scheduled flights.

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 All baggage which is connecting through DCA from all the seven cities was

included in the regression model because if transfer bags or DCT do not make

connection on the scheduled flight, then the failure to load baggage mishandling

begins. The other baggage that was included in the model is all outbound baggage

which was checked-in by passengers at DCA to other cities. The checked-in baggage

may fail to be loaded on flight because of too many checked-in bags during peak time

hours at the airport and that BRU could not have identified baggage on time for

taking the scheduled flight, as now we know that DCA BRU baggage is manually

sorted.

The unusual incidents like bag system failure at all seven airports could cause

the problem of failed to load to escalate in DCA and cost the airlines thousands of

dollars if not immediately handled. Therefore, unusual events are critical situations

which significantly contribute to the problem and cant be overlooked. Use of scanner

technology is another factor towards the solution of the problem through efficient

baggage loading and easier tracking, so this parameter was included in the model.

The fact those weekdays had different baggage volume flows from weekends;

weekdays were included in the regression model as an important factor.

The regression model is:

Failed to Load = a0 + a1 Weekday + b1 Scanner + c1 MIA_DCT + c2 DFW_DCT + c3

ORD_DCT + c4 JKF_DCT + c5 BNA_DCT + c6 RDU_DCT + c7 STL_DCT + d1

TOT + e1 Unusual;

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Parameter Estimate Standard t Value Pr>|t|

Error

Intercept a0 = -1.64 2.97 -0.55 0.58

Weekday a1 = -0.30 0.52 -0.58 0.57

Scanner b1 = 0.02 0.61 0.04 0.97

MIA_DCT c1 = -0.01 0.01 -0.03 0.31

DFW_DCT c2 = -0.01 0.05 -0.09 0.93

ORD_DCT c3 = -0.02 0.03 -0.72 0.47

JFK_DCT c4 = 0.04 0.04 0.94 0.35

BNA_DCT c5 = -0.04 0.08 0.52 0.61

RDU_DCT c6 = 0.03 0.02 1.12 0.27

STL_DCT c7 = -0.07 0.07 -0.94 0.35

TOT d1 = 0 0 1.13 0.27

Unusual e1 = 10.62 1.76 6.04 0

Table 13: Effects of Baggage Flows on Failed to load Baggage Mishandling

The R-Square is 0.50 implying 50% of the data variation is explained by the model

and the mean daily mishandled bags due to failed to load is 1.85. On average two

bags are mishandled every day and costs the airline US $ 200.00 daily for failing to

load bags on the scheduled flights from DCA. The reasons could be passengers

checked bags late probably close to the cutoff time (usually 15 -30 minutes of flight

departure), probably DCA tracking system of scanners is not used in the BRU where

it is mostly needed to help in the sortation of bags fast enough.

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x Observation 1: Surprisingly, the use of scanner technology positively

contributes to the total number of failed to load baggage. However, we dont

observe a significant effect on the performance difference. This might be due

to employees unfamiliarity with the scanner technology, the process

inefficiency (scanning baggage only at plane loading is not enough, and it

requires to be done at check-in, TSA area and BRU, cart loading and plane

loading).

x Observation 2: Although the effect is insignificant, the AE traffic like that

from JFK, BNA, and RDU positively contributes to the total number of failed

to load baggage. This shows that AE may have operational inefficiency in

comparison with the AA baggage handling.

x Observation 3: It seems that hub airports such as DFW, ORD or MIA are

doing better than the non-hub airports such as RDU, BNA, and JFK except for

STL. Although the effect is not significant at the 0.05 level, STL seems doing

better than other airports in terms of loading bags on right flights.

x Observation 4: The effect of outbound traffic on the number of mishandled

bags due to failing to load is not significant. This implies that the services for

outbound baggage are doing well. Therefore, failure to load bags on correct

flights is not mainly caused by volume of the outbound traffic from DCA; it

could be by other effecting factors like the unusual events.

x Observation 5: The effect of the unusual events on mishandled bags due to

failed to load is significant at the 0.001 level. Unusual situations like severe

bad weather leading to flight cancellations, or security alert incidents could

96
cause the problem to be heavily evident in DCA. On average, there will be an

increase of 10.62 mishandled bags if such an event occurs. If we consider the

US $ 100.00 standard cost of a mishandled bag daily, then the airline will lose

more than US $ 1,000.00 due to the existence of such event.

{(11 bags * $ 100.00 daily cost per bag) = $ 1100.00 Daily lose}

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Chapter 5: DISCUSSION 5

5.1: Information Technology (IT) and Operational Efficiency of Baggage Handling

Meeting security needs at DCA, without slowing down any stage of baggage

handling operations is a priority for BRU and ramp baggage handlers. Scanners are

used at the AOA when loading baggage at the aircrafts and they contribute to the

improvement and efficiency of baggage handling. However AA and AE in DCA have

just introduced the scanner technology use, therefore its operations are still at the

infancy levels. A clear picture of scanner technology use at DCA needs more time to

be painted and get real tested results.

5.1.1: Baggage Tracking by Scanning

Figure 18: Streamline of Baggage Handling Process

In Figure 18 scanners are currently used at the plane loading phase only in DCA (the

fourth stage Plane Loading (Ramp) in Red color). There is need for introduction of

using scanners all way through Baggage check-in, baggage sorting and loading at

BRU to Plane loading at the AOA. The use of scanners can streamline baggage

handling processes by quick baggage management and avoiding flight delays caused

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from passengers not boarding and when inbound connecting flights are delayed due to

ramp baggage handling not finishing on time [14]. Human errors are reduced in

sorting out baggage tags, staff access to baggage information regarding status,

destination and routing of baggage update and baggage location in ULDs. Therefore,

it is imperative for DCA to expand its scanner technology use at the station for better

and efficient output in baggage services.

5.1.2: Human Factors

AA Code 5 35 39 40 50 88 93

Mishandling Code Failed to Load Agent Mishandling Baggage Service Security Mishandling Damage Baggage Baggage System PReroute TOTAL

Mishandling AA to AA CLAIMS
Time Period DEC. 09 196 15 22 5 35 0 187 588
Before Use of Scanners JAN. 10 35 2 14 3 53 13 46 259
2009/10 FEB. 10 14 8 11 2 31 0 38 259
TOTAL 231 25 47 10 119 13 271 1004
% 23% 2% 5% 1% 12% 1% 27%

Time Period DEC. 10 69 30 6 4 82 0 79 384

After Use of Scanners JAN. 11 18 7 12 0 88 4 55 239
2010/11 FEB. 11 33 14 3 2 80 0 30 226
TOTAL 120 51 21 6 250 4 164 845
% 14% 6% 2% 1% 30% 0% 19%

Table 14: Effect of Scanner Use by AA at DCA

According to data in Table 14, there is a great improvement in the listed codes;

5, 35, 39, 40, 88, 93, except code 50 in the period 2009/10 before scanner use and

2010/11 after using scanners. The above identified codes have direct connection with

the scanner use except code 50 (damaged baggage). Code 5 (failed to load), code 39

(BSO), code 40 (security mishandling), and code 93 (reroute AA to AA) all involve a

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human factor element during the baggage operation and scanners directly help in the

efficiency and improvement of these services. The statistics indicate that more than

50% improvement from all codes other than code 50 happened after the introduction

of scanner use from December 2010. The most mishandled codes from earlier

discussion are code 5, 50 and 93 which costs the airlines huge loss in correcting the

problems. Data in Table 14 shows a significant drop in the figures which implies an

improvement by the use of scanners which help baggage handlers, and TSA screening

officers in minimizing human errors such as loading wrong baggage on flight,

misconnecting baggage due to flight delay, and mis tagging bags at ticket counters.

The scanned data helps BSO agents in tracking baggage and improving the

information visibility when lost baggage claims are being opened by passengers at

BSO. Agents abilities to minimize errors and offer quicker and better services to

passengers seem to have increased although one predominant issue of damaged

baggage have increased significantly as seen in Table 14. It has been noticed that

unusual situations during the baggage operations cause the significant increase in the

damaged baggage as baggage traffic flows are affected by the baggage operating

systems from other stations that feed DCA with baggage due to bad weather and

plane mechanical issues.

5.1.3: Baggage Screening Scanners

TSA use ETD and EDS CT scanners to check the baggage that are checked

on all outbound planes at DCA. The security scanners have made the baggage move

fast at DCA, TSA screening checkpoint. Passenger baggage easily goes through the

machine and continues descending to BRU for sortation until ramp loads it on the

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aircraft. According to AA baggage statistics of 2010/11 (see pie chart above), security

mishandling is only one percent and ranked in position 15 among all the twenty DCA

itemized baggage mishandlings types. This is an indication that security scanners help

in avoiding the baggage delays at the TSA baggage checkpoint, otherwise other TSA

screening procedures are slower and would be taking longer time to clear bags and

leading to baggage failure to load. The use of ETD and EDS technology helps

ensure the safety and efficiency of baggage handling operations at this airport.

5.2: Information Technology (IT) and Enhanced Security

Explosives detection equipment such as EDS and ETD CT scanners are the

current technology recommended to be used by TSA for screening all passenger

checked baggage for outbound aircrafts. TSA ensures that all baggage is screened 100

percent as mandated by US Congress. The purpose of this system is to reduce the

probability of exploding a plane down by terrorist. TSA uses several other methods in

implementing operational efficiency and security measures like x-ray scanning for

carry-on bags, metal detector portals, physical searches, canine teams, Computer-

Assisted Passenger Screening (CAPS)46 and PPBM47 [15].

46
CAPS is an automated procedure which reviews data in airline passenger records and matches data
with security intelligence data of people on watch list, grouped into high risk and low risk. When
passenger is selectee or his or her bags are on high risk then additional security measures like PPBM
will apply.
47
PPBM is positive passenger bag matching and it one of the security procedure which involves the
off-loading of passengers checked baggage from the plane if passenger is not available at the
departure gate.

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 5.2.1: Baggage Flow and Security

Approximately 50 percent of all airplane baggage is carry-on and 50 percent

checked-in at the ticket counter or curbside areas or at the departure gate. TSA X-ray

screens 100 percent all baggage at its checkpoint and in some cases some bags are

investigated with ETD devices or physically searched before they are cleared on

board [15]. Carry-on baggage proceeds with the passenger for shelving in the

overhead cabin or under a seat, while checked-in baggage is sent to the bag room

where it is sorted. If a passenger checked-in bags at the ticket counter, then he or she

is asked three questions regarding the contents and control of their bags. The

passenger and bag are subjected to CAPS, and if he or she is determined by CAPS as

selectee48 then PPBM is applied too and if cleared, bag will be loaded to the

aircraft. For gate check bags, CAPS and PPBM will not be applied because bags were

already x-ray radiography at the TSA checkpoint [15].

Figure 19: Baggage Flow and Security Screening with Passengers

48
A selectee is a person who purchases an air ticket in less than 24 hours and using cash or otherwise
to get the ticket. Security regulations consider this person a risk passenger.

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 Figure 19 shows how Information Technology influences security in

determining the baggage reconciliation. It is estimated that on USA domestic flight

there is 14 minutes delay on departing flights and it costs airlines US $ 100 million

per year [18]. This is why the use of effective tools in the passenger and baggage

processes is very important for airlines like AA and AE at DCA.

5.3: IT- Enhanced Security Chain Improves Baggage Handling Efficiency

With increasing number of dissatisfied passenger, airports and airlines are on

growing pressure to control costs, and trying to improve efficiency associated with

increased security mandates compliances [12, 25]. For the aviation industry to be

competitive and profitable in a volatile business climate, adopting new customer

service business model will be necessary and it includes greater collaboration and

flexible infrastructures within airlines and airports [33]. The unpredictable fluctuating

fuel prices along with the stiff competition and ATSA, November 2001compliance

costs are constraining airlines and airports in USA to reposition their approach in

passenger screening and baggage handling. The main challenges in the aviation

industry are securing and tracking passenger baggage as well as customer satisfaction.

5.3.1: RFID Substitute for Bar-Code Improves Baggage Handling

Use of bar-code on baggage tags has been in operation for a long time and

relatively cheaper and secure in baggage handling. Bar-code labels directly link

passengers with their baggage, but identifying the right bag in a right plane and

baggage transfers from plane to plane could be very challenging. The only times

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when airlines could know the location of their passenger baggage is during check-in,

and tagged for departure, and when the passenger retrieves it from the baggage

carousel at arrival [19]. Radio Frequency Identification (RFID)49 has been suggested

as good substitutes of bar-code tags by several organizations like FAA, TSA and

IATA as potential solutions for baggage mishandling issues. RFIDs potential to

capture data is 100% compared to 85% of bar-code tagging system, therefore it

enables increased visibility of baggage [14] due to the enhanced tracking and logging

capabilities which reduces incorrectly routed baggage to be redirected to the right

ULD before they are loaded into a wrong flight. This curtails mishandling costs by

minimizing the average time of baggage screening and baggage missing original

flight due to screening delays [14].

The RFIDs pilot projects are being implemented at McCarran International

Airport in Las Vegas (LAS) and Hong Kong International Airport where operational

improvements have been realized, enhanced security and better customer service

satisfaction is enjoyed[19, 34]. TSA helped funding the It is found that use of RFIDs

was a significant element in system effectiveness and the most cost-effective to

integrate EDS CT- scanners into baggage handling conveyors lines [19]. DCA should

investigate McCarran International Airport performances [35] on RFIDs in details

and make verification research if they could adopt a similar system because

McCarran has a similar business interest like DCA. Most passengers flying to

McCarran International Airport in LAS as their final destination, therefore security

and improved operations are more important than baggage transfers (a case for Hong

49
RFID is a new technology developed which is wireless and use information technology to
automatically identify products, resources, items and assets using devices known as RFID tags.

104
Kong International Airport). This is a similar model for DCA, with few transfer

baggage, tight security and most passengers use the airport as their final destination.

McCarran International Airport RFID system helps in capturing accurate data and

easily generates accurate reports which in turn help the airport meet U.S. homeland

Security Act requirement [19]. According to the statistics of 2009/10 and 2010/11,

baggage mishandling figures are still very high after bar-code handheld scanners were

used. Therefore, implementation of RFIDs could be cost-effective way approach for

the problem.

5.3.2: Improved Baggage Handling Customer Service Using RFIDs

According to Jaska, P., et. al., service profit chain applies to airport baggage

handling in three phases: employment performance, external service value and

service success [36]. Using RFID as a tool, employee performance is improved

during the baggage flow as manual intervention is minimized and reduction of

possible human errors is realized. Individual baggage scanning turns to be more

flexible [36]. The external service value phase offers customer access to his or her

baggage tracking information which is accurate in a secure and private way by having

a private access code provided by BSO when opening a lost baggage claim for

tracking a lost baggage or a PPS shipment using the internet. In the service success

phase processes are automated and manual intervention is reduced which

consequently reduces labor requirements and rate of lost baggage. Customer

satisfaction is gained as they experience flexibility, accuracy and security [36].

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 5.3.3: RFID Tags Improve Baggage Handling Efficiency

According to the IATA study of 2005 [33, 37] transfer baggage mishandling

accounted for 61% (of all baggage delays), followed by 15% failure to load as the

second largest mishandling in that year. The figures suggest that transfer bags were

posing a significant problem in the aviation industry during that time. Five years later,

if we consider AA data for DCA of 2010/11, transfer bags percentage is 20% and

failure to load is still 15%, suggesting that the problem of baggage mishandling

havent changed much in some airlines like AA and AE even if innovation of new

technologies can help in the problem solution. The deployment of RFID at DCA

along with already existing bar-code scanning technology will help to improve the

security and baggage mishandling issues. Although it may not be cost-effectivet to

implement RFIDs, DCA security cant be compromised because the airport is very

close to the Washington D.C. Federal properties which are highly safe guarded. IF

RFIDs are implemented, they will track baggage in real time; prevent misplacement

of baggage in ULDs or carts or incorrect baggage loading; reduce the time for

passenger bag match; improve handling of unclaimed baggage; quick data matching

of passenger information against suspicious baggage [37]. In the due source of

generating the RFID label, an RFID tag is fixed on it which includes all the itinerary

of the passenger who owns the bag with all security concerns stored on the tag,

ensuring that as the baggage moves, timely alerts are still communicated to the

designated authorities [37].

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 5.3.4: Data Systems Integration

IT infrastructures and communication technologies at airports play a very

significant role in information sharing especially in baggage handling.

Figure 20: RFID Visionary Baggage Handling Process and Benefits

Figure 20 shows visionary RFID baggage handling process and the resulting

benefits. A newer technology called Service-Oriented Architecture (SOA) enhances

information sharing among baggage and other systems [33, 34, 38]. SOA integrates

systems in order to improve quality of baggage handling and complete data with

passenger and baggage connection information. Use of RFID technology integrated

with bar-coding techniques 100% tracks and trace baggage to improve the

irregularities rate. For this case RFID improves the security of baggage; increase

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baggage traceability through the whole baggage movement chain; enable baggage

reconciliation time to go down; automate system functions and speed processes are

enabled; and transit management optimization is experienced in this integration

system which reduces transit time [28, 33].

The visionary process as seen in Figure 19 shows how a passenger can check

herself or himself on a remote terminal other than airline ticket counter at the airport

easily with improved baggage services all way through BRU sorting, loading up to

the AOA loading. Since the greatest problem of AA and AE is mishandled baggage at

DCA, SOA may prove to be a better mechanism in improving lost baggage issues as

highlighted in the last column of figure 19. Technically minimizing lost baggage at

DCA indirectly reduces cost in lost baggage compensation and raises customers

satisfaction towards the AA and AE services.

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Chapter 6: CONCLUSION

6.1: Summary of Major Findings

Data collection process is extremely labor intensive. We collected two months

data, which is sufficient for statistical analysis. Throughout this research, we came to

learn that baggage mishandling could be caused by various reasons which are often

underestimated by government authorities. Application of appropriate technology at

most sensitive airports is a key factor in the security enhancement in this country.

Lack of strict security measures could undermine the economic implications in USA.

There has been no good retraining of AA and AE employee supervisors on new

methods of baggage handling, following procedures and adapting change in modern

operations. Therefore, appropriate mechanisms have to be in place.

6.1.1: Destabilizing the USA Economy

Terrorists disguising as good passengers can use checked-in baggage packed

with explosives and use it as weapon to blow up American planes and claim innocent

lives of American people. It is identified from the previous experience of terrorist

attempts in sabotaging the aviation industry and the continued threats in all airports in

USA prove the case when you note by the security color code at all USA airports are

either Orange or Red and never Green since September 11, 2001. The color codes

indicate the level of threat at airports which triggers the threat alert.

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 6.1.2: Security Compromise with Cost

The security of American people on all American airplanes was enhanced by

the mandated agencies, and the security enhancement measures have increased a high

security cost on the baggage handling in the aviation industry but the USA

government seems not to compromise security with cost because the safety of

American people on planes is more valuable. Safe guarding the most sensitive

Federal government property in WMA from terrorist attacks and threats is key issue

of interest by law makers in USA like the congress. The aviation industry in USA

is a multi-billion industry with a sizeable contribution in the USA economy.

6.1.3: Baggage Security Threats

Law makers in congress50 and other agencies in USA are concerned about the

way how other countries handle the issue of security where American aircrafts do

business but USA technical security measures of civil aviation do not apply to those

overseas inbound flights where most baggage threat related issues are more

evidenced. Probably undermining the issue of countries sovereignty could be the

hindrance factor in this regard. TSA the enforcing agency in implementing the

security does not do any baggage screening mechanism on international inbound

flights other than the outbound flights only. This is lapse in baggage security handling

in this country. Other countries havent invested yet in the U.S. type of baggage

security screening ttherefore, more threats could rise from this weak area.
50
Law makers in the USA congress passed the International Security & Development Cooperation Act
of 1985, reflected in 49 U.S.A. Code Section 44907. The Act requires foreign airports to have security
standards which assure good levels of security on all flights coming into the USA. If governments of
other countries do not agree with the USA International Security Act, then the USA president can
prohibit their aircrafts from providing transportation between their countries and USA airports.

110
 6.1.4: Influence of Technology on Airlines Baggage

The use of appropriate, advanced and efficient technology at the airports is

influenced and depends on the size and volume of traffic they experience. This

becomes a very important tool for airlines operators, general aviation and TSA in

managing the secure, smooth flow and routing of baggage in USA. The smooth flows

of baggage reduce the level of mishandled baggage among airlines and consequently

reduce the costs of servicing mishandled baggage. Airlines are losing cliental because

of inefficient baggage handling and a cliental gain for those airlines who improved

baggage services by investing in new technologies to tackle the problem. Public

records prove that millions of passengers every year suffer great consequences of

mishandled baggage in USA. Their costs and stress of lost baggage can aggregate to a

very difficult situation in gaining recovery after the damage.

6.1.5: Employees Adaptation to New Technology

AA and AE management at DCA simply introduced the use hand-held scanners

without employees knowledge why they use it and make them like it. Based on the

information I received from the employees I interviewed from both airlines, there was

totally different reactions towards hand-held use of scanners. All most all AA ramp

handler did not like the use of scanners, and their reason of dislike was that the

scanners are very slow, sometime lose network and that they perform their job faster

without them. I also noted that most of AA employees have worked on the ramp

position for more than ten to twenty years and very few with less than ten years. So

the persons age with attitude change is a serious factor in this issue. However, when

I talked to AE employee group, who are fairly younger with few years (less than six)

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of experience in the airline industry, they seemed to be very open, and liked the use of

hand-held scanners because they make their job a lot more easier, quicker, and fun

doing it. They also pointed out that the scanners network signals get lost sometimes

but not often and that the scanners still help them so much and they are very accurate.

All AA and AE employees were trained but were not exactly told why they will need

to adapt the new method of scanning all baggage for efficiency and effective

management of baggage. They have the I dont care attitude.

6.1.6: Baggage Check-in Restrained by FAA Regulations

DCA did not have an Off-Airport baggage check-in51 like some other airport in

New York, San Francisco in California, and Miami in Florida prior to September 11,

2001 and did not get to offer these services to passengers due to FAA regulations

which require prohibition of remote baggage check-in from different location

including Hotels. This regulation was result of stopping all remote baggage handling

services in places like Las Vegas which used to be serviced by Certified Airline

Passenger Service52. This used to be good service and could have impacted the rate of

mishandling if it was still having a chance to be offered by AA and AE in DCA, but

under The Emergency Security Amendment implemented by FAA on September

11, 2001, imposed Alert Level IV security measures to all airports in USA [12].

51
An Off-Airport baggage check-in is remote place from the airport, usually at downtown areas where
passengers check-in baggage before they get to airport and get processed without the passenger.
However, Off-airport baggage check-in proved to be very expensive to restart again due to the FAA
regulations that require TSA officers and EDS and ETD- CT scans. Airlines are not ready yet.
52
Certified Airline Passenger Service is local baggage handling company which is privately owned,
had contracts with at least 10 airlines to issue boarding passes to passengers and receive their baggage
for enplaning LAS passengers. Passenger only required check-in between 2-12hours before flight
schedule and they worked for a fee of only US dollar $ 6.00 per passenger service not per baggage.

112
Section 6.2: Summary of Contributions

It has been very interesting working on this kind of research, and it gave me a

new way of looking at airport baggage functions and their related security amongst all

airport operators. It has been very difficult collecting data about airport security and

the airline data collection is extremely labor intensive. This research have utilized the

airlines raw statistical data and derived useful conclusions about how baggage flows

affect airports operations, federal government agencies functions, federal annual

budget, employees of government agencies and airlines roles and responsibilities, and

resources used at airports such as different kinds of equipment and tools. Major

findings and observations from the regression models will help in triggering the

reassessment of new strategies of baggage handling in the area of new technology

investment with new methods of airports security policy measures and enhancements.

Baggage mishandling has been an ongoing airlines problem. Without critical

research analysis towards the problem, little improvement could be realized and

sometimes resources get misguided due to lack of proper knowledge of the real cause

and level of the problem. Therefore, the economic analysis of baggage routing and

airlines security in this research could help in guiding investors such as airlines and

federal government to identify the need, effectively plan and manage resources

efficiently at airports of different sizes in United States of America. We also

recommend DCA to focus more on how to utilize new technology like RFIDs

suggested in subsection 5.3.1.

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 Appendices
I. Gateway Airport List and their Geographical Map

Source: TSA/DHS

114
 II. List of Baggage Mishandling Codes

Code 1: Baggage available not transferred OA-AA

Code 3: Baggage not transferred AA-AA time available
Code 5: Failed to load
Code 6: Unload error / Override
Code 8: Baggage misload by line cargo
Code 13: Bag not transfer AE-AA time unavailable
Code 35: Agent Mishandling
Code 39: Baggage service mishandling
Code 40: Security Mishandlings
Code 41: Gate bag mishandling
Code 50: Damaged Baggage
Code 51: Pilferages
Code 61: Bag switch on delivery
Code 88: Baggage system problems
Code 93: Rerouted AA AA
Code 94: OA upline mishandling

III. Table of Notation

VARIABLES INTERPRETATIONS

CF Baggage connecting through any of the seven cities to DCA as final stop.

DF Baggage from one of the seven original city to DCA final destination.

DCT Baggage from anywhere connecting through DCA to anywhere and OA.

TOT Baggage checked-in DCA city for outbound flight to anywhere.

Unusual Unexpected events which cause changes or disrupt any flight schedule.

NonHubDF Direct flight baggage from cities with low traffic (BNA, STL, RDU, JFK).

NonHubCF Cities with low traffic baggage transfer before coming to DCA.

MIA_DCT Baggage from MIA transferring through DCA

DFW_DCT Baggage from DFW transferring through DCA

ORD_DCT Baggage from ORD transferring through DCA

JFK_DCT Baggage from JFK transferring through DCA

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RDU_DCT Baggage from RDU transferring through DCA

BNA_DCT Baggage from BNA transferring through DCA

STL_DCT Baggage from STL transferring through DCA

MIA_DF Baggage directly checked-in MIA as original city to DCA final destination

DFW_DF Baggage directly checked-in DFW as original city to DCA final destination

ORD_DF Baggage directly checked-in ORD as original city to DCA final destination

MIA_CF Baggage connecting through MIA to DCA final destination

DFW_CF Baggage connecting through DFW to DCA final destination

ORD_CF Baggage connecting through ORD to DCA final destination

Scanner Baggage loading tracking technology system used at DCA airport

IV. 2011 DCA Traffic Summary of Baggage Flows

Detailed data is confidential and is not reported here.

V. 2010 DCA Traffic Summary of Baggage

Detailed data is confidential and is not reported here.

VI. Damaged Baggage Code 50

Detailed data is confidential and is not reported here.

VII. Rerouted AA to AA Code 93

Detailed data is confidential and is not reported here.

VIII. Failed to Load Code 5

Detailed data is confidential and is not reported here.

IX. AA and AE Traffic Summary of Baggage

Detailed data is confidential and is not reported here.

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 X. Set of research study questions to AA and AE personnel

Manager of Services
American Airlines
Reagan Washington National Airport (DCA)
1 Aviation Circle, Washington DC 20001

Re: Baggage Handling Services Study Questions to American Airline at DCA to be

answered by Assistant General Manager, DCA Manager of Services and his team
Attention Mr
From our discussion in August 2010 about intended Research project for evaluating Baggage
handling services at DCA by University of Maryland Baltimore County (UMBC) Information
Systems Masters program student Johny Sozi, I would like to have this opportunity to ask
you kindly answer a list of questions below (see attached). Questions are grouped into five
categories:
Section I: Business Process. Questions 1 3;
Section II: Baggage Handling. Questions 4 13;
Section III: Baggage Policies & Security Concerns. Questions 14 -19;
Section IV: General Question. 20 - 22;
Your timely response will be greatly welcome and thank you in advance.

Johny L Sozi
Masters of Information Systems Student (UMBC)

Questionnaire

Section 1: Business Process

Question:
1- (i) Demonstrate the process flow of baggage handling services in DCA for out-bound
and in-bound flights?
(ii) Provide estimated costs incurred at these different stages of baggage handling
processes for out-bound & in-bound flights at DCA.
(iii) Provision of access to an annual financial statements report is highly appreciated.
Question:
2 (i) Do you have operational support functions (like tagging, sorting) at different stages
of baggage handling in DCA?
(ii) If yes, can you describe these operational support functions and how they work in
your station at DCA?
Question:
3 (i) Do the IT systems at DCA have the capacity to visualize the right bag in the right
place, at the right time and determine if the bag is being transported correctly?
(ii) If Yes, how is done? Please describe how data is captured, information is transferred,
and who has access to what information during different stages of the baggage handling
process.

117
 (iii) If No, how do you handle this process of knowing different stages of the bag
movement end-to-end?
Section II: Baggage Handling

Question:
4- (i) How are the roles of baggage handling services allocated in DCA between the
American Airline and Airport Authority (MWAA, TSA, and FAA)?
(ii) What specific role does each one play?
(iii) Who decides these roles for each party?
(iv) How are the roles and policies enforced?
Question:
5- (i) Are there specific roles assigned during the process of end-to-end baggage handling in
DCA? If Yes,
(ii) What are these different roles at DCA and how do they affect the process system in
terms of time used, costs, materials and machinery used, man power, etc?
(iii) How much in general do these different roles cost the American Airline at this
station DCA?
Question:
6- (i) What is the system used in transacting or managing or tracking baggage handling at
DCA from origin to destination (end-to-end)?
(ii) How do you respond and track a particular bag from the time passenger drops it with
skycap or AA ticket counter or TSA screening area until the passenger claims it at his or
her final destination?
Question:
7- (i) Do your DCA station have the capabilities of tracking baggage connecting to and
from American Airlines?
(ii) If Yes, how is it done?
(iii) If No, how do you handle and access information concerning connecting baggage in
DCA?
(iv) Are there any major costs involved with connecting baggage from other Airlines to
American Airline in DCA?
(v) If Yes, list them with their estimated monetary values.
Question:
8- (i) How do you track if American Airline passengers are picking up their right bags from
the DCA arrival carousal?
(ii) Does it cost the American Airlines if passengers pick wrongs bags from the baggage
arrival carousal?
(iii) How often does this problem happen (wrong bag pick up) at DCA?
(iv) Can you give estimated figures for this problem if it happens?
(v) How much has American Airline spent in this kind of problem since the beginning of
this year 2010 at DCA?
Question:
9- (i) Do you have special baggage treatment of AA passengers travelling confirmed seat in
first or business class?

118
 (ii) How are they remunerated if their bags are not with them on their flight?
(iii) Do these lost baggage for first or business class passengers usually happen at DCA?
(iv) How often does it happen? (Avail tracking records if possible).
Question:
10- (i) Do DCA experience any damaged passenger baggage per month? If Yes,
(a) What nature of damage that occurred at DCA since the beginning of this year
2010?
(b) Do you know the causes of these damages of passenger baggage?
(c) How do you help the passenger in this situation for the airline not to lose
him/her?
(ii) How many and how much does this damaged baggage cost the American airline?
(Get estimates from January 2010 to present time).
(iii) How is the process of damaged luggage done? How efficient is it to your airline VS
passengers?
(iv) Are there any other related American Airlines costs caused by passenger damaged
baggage? If yes, what are they?
Question:
11- (i) Do different seasons (winter, fall, Spring & Summer) have any major effect on the
flow of baggage handling services? If yes explain how.
(ii) What level of impact do these seasons get to the American Airline in terms of costs,
security and others?
(iii) Give total estimates of baggage handling services costs for each different season in a
year at DCA?
Question:
12- (i) Do you get IT system failures occasionally in DCA?
(ii) If yes, how many times in a month or year?
(iii) What kind of IT systems failures do you experience?
(iv) What part of the American Airline services that get affected most?
(v) How are they solved and by who?
Question:
13- (i) How many total number of baggage did DCA receive from in-coming flights in the
following years 2008, 2009, 2010 respectively (In-bound Baggage)?
(ii) How many total number of baggage did DCA receive from passengers originating
from DCA to other cities in 2008, 2009, and 2010 respectively (Out-Bound Baggage)?

Section III: Baggage Policies and Security Concerns

Question:
14- (i) What are the AA company policies about the time duration of delivering baggage to
carousal from the inbound flights?
(ii) How do you track the efficiency performance of this service handled by the ramp?
(iii) Provide some metrics if available.
Question:
15- (i) How often do AA change its baggage policies?

119
 (ii) What factors (e.g., competing airlines policy change, government) would affect the
baggage policy change?
(iii) Do passengers excess baggage checked in on outbound flights have any effect on
the performance and cost of baggage handling at DCA?
(iv) What are the effects of policy change on mishandled baggage at DCA? Explain how
they happen.
Question:
16- (i) What are your most security concerns about baggage handlings as an airline operating
at DCA?
(ii) How do you handle these security concern scenarios?
(iii) What is the cost burden of this baggage security issue to AA at DCA?
(iv) Do you have partnership with Government agencies in handling baggage issues?
(v) How do these agencies help you in baggage handling issues at DCA?
(vi) How are the costs involved in the baggage handling at DCA shared between AA and
these government agencies?
Question:
17- (i) Have you ever hard security concerns [ like flight delays or cancellations due to
security violations (sv)] before in the most secure areas of DCA airport?
Please give some examples.

(ii) If yes, how many incidents happened in the previous years?

(a) What is the estimated cost?
(b) Did those incidents lead to any change in security policy?
(iii) What authority (airport, airline, government, TSA, MWAA etc) is responsible for
security policy making?
(a) How often is the security policy updated?
(iv) How is the security related policies get enforced and implemented at the most secure
areas of DCA airport?
(v) Is the security policy universal or locally determined?
(a) Are different airports allowed to have different security policies?

Question:
18- (i) Increased use of technology in both passenger ticketing and baggage check-in have
improved your operations at DCA.
(a) What is the overall cost impact of these technologies on baggage handling at
DCA?
(b) Show some figures if available
(ii) Technology use in explosive trace detection, bag search, advanced imaging
technology, behavior detection and K9 teams (use of dogs to sniff unauthorized items) are
some of the techniques used at DCA in baggage screening.
(a) How much does each of these technologies add to the total cost of baggage
handling?
(b) Give any data available or source where this information could be accessed.

120
 (iii) Employee security procedures on baggage and the best practices of security
checkpoints are serious factors in the secure baggage flow at DCA.
(a) What are the DCA employee security procedures on baggage?
(b) How much does it cost American airlines (AA) at DCA to implement and
maintain these baggage security practices?
Question:

19- (i) Prior to 9/11 ( Sept 11,2001), airlines and airports paid directly for most security cost.
Now TSA assesses each airline a monthly security fee based on the amount it paid for
passenger screening.
(a) Does this change apply to American Airline at DCA too?

(b) If No, please explain the different policies applied to AA at DCA.

(c) If yes, what is the total cost of baggage screening at DCA for American Airline for
the 3 years before 9/11 and after (i.e 1999, 2000, 2001, & 2008, 2009 and 2010)?

(ii) Please give source of information and if possible attach support documents or access
links.

Section v: General Question.

Question:
20- (i) Please briefly describe the business relationships between AA and the outsourced
BSO (baggage service Office) & Baggage delivery contractors for key baggage handling
parties.

(ii) In order for me to understand the business relationships of AA and other baggage
contractors:
(a) What are the major reasons of outsourcing these parts of AA operations at
DCA?
(b) What criteria do you use when making the outsourcing decision?
(c) What are the responsibilities, performance metrics, reward and penalties of
AA contractors at DCA?
(d) What are the AA responsibilities towards its contractors?
(e) What are the differences before and after outsourcing these major parts of the
AA operations to contractors?
(f) Are there any financial savings in baggage handling after outsourcing these
AA baggage operations?(Provide source)
Question:
21- (i) Do you have or intend (plan) to offer cargo services and baggage self-check-in at
DCA airport soon or near future?
(ii) What is or would be your expectations from cargo and baggage self-check-in
services at DCA?

121
 (iii) What is the ratio between the costs involved in baggage handling services and the
total operational budget at DCA station?
Question:

22- (i) Is it possible to have access to DCA baggage financial records

and baggage statistical data?
(ii) If yes, attach copies of the last 2 years or link of access
to these mentioned above records and data.

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 Glossary

List of Abbreviations and Acronyms

AA - American Airline
AE - American Eagle
AMR - American Corporation
AOA -Aircraft Operations Area
AQR - Airlines Quality Rating
ASAC - Aviation Security Advisory Committee
ATSA - Aviation and Transportation Security Act
BCO - Baggage Change Order
BDO - Baggage Delivery Order
BIP - Baggage Improvement Program
BNA - Nashville Airport
BMS - Baggage Management System
BRCU - Bag-Room Control Unit
BRU - Bag Room Unit
BSO - Baggage Service Office
BWI - Baltimore-Washington International
CAPS - Computer- Assisted Passenger Screening
CB - Connecting Bags
CBS - Central Baggage Service
COD - Cash On Delivery
CF - Connecting Flight
CT - Computerized Tomography
DC - District of Columbia
DCA - Washington-Reagan National Airport
DCT - Direct Connecting Transfer
DF - Direct Flight
DFW - Dallas/Fort Worth Airport
DHS - Department of Homeland Security
DOT - Department of Transportation
EBSP - Electronic Baggage Screening Program
EDS - Explosives Detection Systems
ETD - Explosives Trace Detection
FAA - Federal Aviation Administration
FSD - Federal Security Directors
GAO - Government Accountability Office
GLM - General Linear Model
HBS - Hold Baggage Screening
IATA - International Air Transport Association
IAD - Washington-Dulles International Airport
IBV - Incoming Baggage Volume

123
IT - Information Technology
JFK - John F. Kennedy International Airport
LCA - Low Cost Airline
MAN - Major Airlines Network
MIA - Miami International Airport
MCT - Minimum Connecting Time
MIS - Masters of Information Systems
NOTAM - Notice to Airmen
NPIAS - National Plan for Integrated Airport Systems
OA - Other Airlines
OHR - On-Hand Room
ORD - Chicago OHare International Airport
PAWOB - Passenger Arriving Without Bag
PPBM - Positive Passenger Bag Matching
PPS - Parcel Priority Service
PVC - Present Value Cost
RA - Regional Airlines
RITA - Research and Innovative Technology Administration
STL - St Louis International Airport
TCB - Tax Credit Bond
TB - Transfer Bags
TOT - Total Outbound Transfer
TSA - Transportation Security Administration
ULD - Unit Load Device
USA - United States of America
VOR/DME - Very High Frequency Omnidirectional Range/Distance Measuring
Equipment
WMA - Washington Metropolitan Area

124
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Useful for Allocating Staff among Airports, but Its Assumptions Should Be
Systematically reassessed, C.A. Berrick, Editor 2007, .GAO Washington DC.
2. Office, U.S.G.A. and GAO/RCED, Airport development Needs: , in
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