The Denver International Airport Automated Baggage

Handling System

MIS 611 Group Project

Winter 2005

Justin Bainum, Hong Ji and Priyanka Kheny

Executive Summary

Baggage handling is at the heart of an airport. The automated baggage handling system

at the Denver International Airport (DIA) was a huge undertaking. Not only would it be the

largest system of its kind in the world but also the most expensive. Originally designed for only

one airline, United Airlines, it grew to encompass all terminals within the airport. This

enormous project had its inherent risks and uncertainties, and encountered many emerging

problems. As a result, the project caused massive delays of the airport opening and budget

overruns. It was regarded as a huge failure and a textbook example of how an IT project could

go wrong.

When the airport was finally opened, it had one automated system, a conventional system

and a backup system for the automated one. In this report, we examined the original rationales

for an automated baggage handling system at DIA, its advantages over conventional systems,

many problems encountered during the project and some solutions to salvage the project. We

also explored the causes for the failure, economic impacts and lessons that can be learned for

future IT projects.

A) Introduction

The Denver International airport was the first undertaking of such magnitude in the last 20

years in the US. At 53 square miles, this airport was designed to be the largest in the United

States. During the construction period beginning in November 1989, 110 million cubic yards of

earth was removed. Besides its massive size it involved state, federal, and local agencies and

various airlines. Denver International Airport planners originally anticipated a $1.7 billion dollar

price tag. The final cost more than tripled to $5.2 billion. When it was finally opened to the

2
public 16 months late on February 1995, it had 5 runways, 88 gates and in many ways

represented a model of the airport of the future. (Ayres Jr, 1995)

Airports are judged by passengers on their ability to handle their baggage systems. Baggage

handling is at the heart of an airport. The baggage handling systems at DIA connects gates in

three concourses where baggage are loaded on and off the plane with two main terminals where

passengers check and claim their luggage. United Airlines in the early planning stages insisted

on an automated baggage system, like the one it operated in San Francisco. United Airlines did

not want to operate on the conventional baggage system because it was time consuming and

labor intensive. Denver officials decided that an automated baggage handling system, most

closely resembling the one at Frank Joseph Strauss Airport in Munich, would be designed at the

Denver International Airport. Denver, after some consideration concluded that all the concourses

at the airport would operate on the automated high speed baggage handling system, not limiting

it only to United Airlines.

Boeing Airport Equipment (later becoming BAE Automatic Systems) was known worldwide

for being a superior baggage system builder. Denver approached BAE systems and asked them

to design an automated baggage system that would serve all the carriers in the various

concourses. BAE came up with a proposal for the Denver International Airport; this system

design was not only the most ambitious and biggest but also the most complex automated system

ever designed. There were numerous benefits of the system

• Reducing the manpower required to distribute the baggage as required

• Bags arriving at a particular concourse would be barely even touched by human hands

once they were unloaded from an aircraft.

• Efficiency in terms of reliability, maintainability, and future flexibility

3
 • Effective in delivering bags, skies, golf clubs and suitcases of all shapes and sizes to and

from passengers.

• Capability of delivering bags right from the main terminals through a tunnel into a

remote concourse and directly to a gate.

• Saving precious ground time and reduce close out time for hub operations, and cut time

consuming manual baggage sorting and handling.

• Moving through the airport at the speeds of up to 20 mph, they would be waiting for the

passengers when they arrived at the terminal.

BAE systems convinced the Chief Airport Engineer (Walter Slinger) that an automated

system of this magnitude would work by building a prototype automated baggage-handling

system. BAE systems built this prototype in a 50,000 sq. ft. warehouse near its manufacturing

plant in Texas. (Donaldson, 1998)

B) Description of the IT

Functionality of the Automated Baggage System

The fully automated baggage system originally planned for the Denver International

Airport was exclusive in its design, its anticipated capacity and its novel technology. At check-in

the baggage is glued with bar code labels that help to identify the bag’s details such as the name

of the bag owner, flight number, airlines, intermediate connections and final destination. The

check-in agent then puts the bag on a conveyer belt. A system exists for dealing with telecar

allocation since no baggage can move without a telecar holding it. Tracking computers which are

operated with the empty car management software (heart of the allocation system) dispatch

empty telecars to where they are needed .The demand for telecars is sensed by the computers by

4
measuring the flow of passengers throughout the airport. During peak times around 3550 telecars

are available for moving baggage. (Schloh, 1996)

The conveyor belt holding the bag advances, when an empty telecar arrives. At a T-

intersection just as the telecar moves a type of high-speed luggage bowling machine flings the

bag, catching the bag in its fiberglass tray. For this purpose each telecar has a tray that allows it

to tilt into three positions for automatically loading, unloading, and carrying its baggage. In order

to increase handling capacity and to save energy the telecars follow the “Dynamic loading”

system where the telecars only slow down without completely stopping for loading or unloading.

To associate the bag with its telecar, a laser scanner that is triggered by photoelectric sensors that

detect a telecar’s presence is used. This laser scanner reads the bar code tag on the bag's handle

and associates the bag with its telecar, before the telecar speeds away.

The computer that scans the bar code tags looks up the table to match the flight number

with the appropriate gate and then sends information to a BAE sortation computer. A tracking

computer with the help of hockey puck-sized radio transponders mounted on the side of each

telecar guides the telecar to its destination. Linear induction motors (LIMs) are mounted

periodically on the tracks help the telecars to move on the tracks. Attached to the bottom of each

telecar is a metal fin that slides through each induction motor and gains impulse as it moves.

Computers control programmable logic controllers (PLCs) that help telecars merge with other

telecar traffic and exit to unload stations. By communicating with PLCs that are responsible for

causing track switches the computer directs a specific telecar. (Neufville, 1994)

Tracking Baggage

The tracking computers monitor each of the system's thousands of radio transponders

which emit millions of messages per second, as the telecars roll. If any change is made the

5
computers must also track all gate assignments so that the telecars can be re-routed. The bags can

be re-routed to special inspection stations by the tracking computers. In case of obstructions or

failures, these computers must keep track so that telecars can automatically detour around a

stalled vehicle or jammed track. (Schloh, 1996)

C.) Comparison of the two systems (conventional and fully automated)

The need for an automated baggage handling system:

When the planners considered a conventional baggage handling system using the tugs

and carts, it appeared to be unsatisfactory for a few reasons. Firstly moving baggage by the

traditional system is a labor intensive and expensive process. The poor ventilation of the

underground tunnel system for baggage movement would have meant that the diesel exhaust of

the tugs would have choked the drivers and loaders of the tugs thus; a manual system which used

tugs and carts was out of the question.

Secondly the spanning of the long distances of the airport was an additional concern. The

traditional manual baggage handling system was deemed too slow, given the huge size of the

Denver International Airport. A good example was the poor time performance of Denver’s

Stapleton Airport with regard to turning around aircraft quickly. At the Denver International

Airport, the distance between passengers, ticket counters, concourses, planes, gates, and the

terminal are much larger than at other airports this makes distance and speed of delivery

extremely important. Concourse A, which is the closest concourse, is 1,300 feet away from the

passenger terminal. Speed became critical in moving baggage to keep flights on schedule. The

traditional baggage system using the tug and cart would take as long as fifty minutes, resulting in

missing most of the flights. Furthermore, across such great distances the underground tunnels

6
were the only direct routes for moving baggage; these tunnels were incapable of accommodating

gas-powered tugs. (Dodge, 1994)

Thirdly the Airlines as well as the city were disappointed in the conventional manual

system. The Airlines were losing a lot of their profits by not keeping their planes airborne, but

grounded and waiting for baggage at the existing Stapleton Denver Airport. This Airport was

frequently rated low among the nation’s airports for its on time performance and for its inability

to handle the high volume of air traffic .By switching to a fully automated system the Airlines

could not only increase their profits but also manage to keep their flights on time.

Lastly unlike the conventional baggage system, which was labor intensive, the

Automated Baggage system designed for the Denver International Airport required none of the

manual labor personnel. The automation of this system is so thorough that it can locate any bag

in the airport. Once the baggage is offloaded from the aircraft the only human contact it has is

with its owner at the baggage claim. On Arrival passengers no longer have to wait for their

baggage at the baggage claim because their baggage arrives there even before they do and on

departure, their baggage arrives at the aircraft before they do.

D) Risks, uncertainties and emerging problems of the project

As with any projects, building DIA automated baggage-handling system had its

uncertainties and risks. However, DIA had more than its shares of problems, due to the

enormous size and complexity and poor planning. There were anticipated risks as well as

emerging problems as the project was carried out. Because of these problems, the project caused

16-month delay for the airport opening and massive cost overrun. It was regarded as a

spectacular failure and a textbook example of how IT projects could go wrong. Therefore, we

7
will examine many problems encountered by the project. It was recognized early on that there

were several inherited risks for the project:

1. The enormous size of the project. Three other airports have this kind of system at much

smaller scales, San Francisco International Airport United terminal, Rhein-Main

International Airport in Frankfurt, and Franz Joseph Strauss Airport in Munich. The DIA

system would be 10 times larger and would use 12 times as many telecars as in San

Francisco. The Frankfurt system runs on trays and conveyor belts rather than high-speed

telecars and is three times smaller in size. Munich’s is far less complex. The DIA system

would require 300 486-class computers, a Raima Corp. database running on a Netframe

Systems fault-tolerant NF250 server, a high-speed fiber-optic network, 14 million feet of

wiring, 56 laser arrays, 400 frequency readers, 22 miles of track, 6 miles of conveyor belts,

3,100 standard telecars, 450 oversized telecars, 10,000 motors, and 92 PLCs to control

motors and track switches. Denver Major Webb once said: “This project is of the same

magnitude as the Panama Canal or the English Channel Tunnel.” (Schloh, 1996)

2. The enormous complexity of this large project. Large projects are inherently more

complex. And complexity increases exponentially as the size increases. The entire system

consists of more than a hundred waiting lines that feed into each other. For example, bags

can only be unloaded from the aircraft and put into the system when the unloading conveyor

belt is moving, this belt will only move when there are empty telecars waiting, empty telecars

will only arrive after they have unloaded their previous loads and have proceeded through the

system, and so on. One step depends on another and one misstep could potentially cause

many following steps to fail. The season, the time of day, the type of aircraft, the number of

8
 passengers on these aircraft, the percentage traveling with skis, etc could all impact the

pattern of loading and the reliability of the system.

3. Novelty of the technology. Individual components of the automated system had been used

successfully at various airports, but integrating them into this size had never been attempted.

The speed for the system would be 10 times as great as the conventional systems. Besides

the three small systems in elsewhere, the technology had not been widely tested, tweaked, or

adopted.

4. Large number of airport entities involved. The system had to connect 88 gates in 3

concourses with check-in counters and baggage claiming areas for all the airlines in the

terminals. Everyone had its unique requirements.

5. High degree of uncertainty in technology and project definition. Because of the larger

scale and higher speed than the three existing systems, and lack of initial commitment from

various airlines, technology and project would have to be modified as the project went along.

The airport itself was built as it was designed. Numerous things had to be changed. For the

baggage system, initial structure for a conventional system for airlines other than the United

had to be modified or torn down in order to accommodate the automated system. Initial

estimation of construction work (remove walls, install new floors etc.) to fit the expanded

system was more than $100 million. As the system was built, airlines made many more

requests for changes. (Bartholomew, 1994)

6. Time constraint. Initially only the United wanted to have the automated system, but 2 years

into the airport construction, BAE was asked to expend the project to the whole airport and

complete the project in 21 months. BAE told the project managers that it needed one more

9
 year to build the system. The less complicated system in Munich took 2 years of testing and

was running 24 hours a day for 6 months before the airport opened. But no one wanted to listen.

(Dubroff, 1994)

As the project went along, many more problems emerged. Some had very serious

impacts on the projects.

1. Management teams. The City of Denver and a consultant team shared the leadership of the

DIA project. It quickly became clear that shared leadership was doing duplicate duties and

not efficient. The project was financed by many sources which all wanted to have a say,

making it increasingly more difficult to coordinate and accommodate different

administrative, political and social interests. Open conflicts appeared and become rampant.

On top of that, the management had no experience of building automated baggage systems,

but it assumed the responsibilities any way without making necessary changes in the

management team. As the new and uncertain technology and not-so-well-defined project

brought out problems, the management team was unprepared and had difficulties to come up

with solutions or alternatives. One month after BAE was awarded the $175.6 Million

contract to build a system for the whole airport, the head of DIA project resigned. (Dempsey

et al, 1994)

2. Overly optimistic about the design. The system design at DIA was a leap in the

technology, not a reasonable increment. Components were expected to perform at their

highest theoretical capabilities without allowing margins for errors or taking integrating

difficulties into account. The project management team accepted the design without

carefully considerations for the space that it must fit into, the weight it may impose on the

10
 building structure, the power required to run it and the ventilation and air conditioning

necessary to dissipate the heat it generates.

3. Loss of a project champion. Chief Airport Engineer, Walter Slinger was a champion for

the automated system. Unfortunately, he died just 6 month after the project started. His

replacement had a different management style and little knowledge of construction, and

hands were tired up by the city council.

4. Constant changes in design and construction. Because of the late start, some of the

structures already built to accommodate conventional systems had to be modifies for the

automated system. In the course of design, construction and testing, individual airlines made

numerous changes to the system to meet their requirements not foreseen before the

construction, such as adding ski-claiming devices and odd-size baggage elevators.

5. Communication difficulties. The channels to communicate among the city, the project

management team, the consultant, DAE and airlines were never well defined. Everyone had

their own tracking systems for the activities. There were several copies of everything. They

tried to merge them into one central database and it took 3 years to get it to work. BAE felt

being restricted to access anywhere they wanted which was granted in the initial negotiation

with the airport. Other construction work was blocking BAE progress.

6. Labor disputes. BAE’s original contract did not meet the requirement to award a certain

percentage of jobs to minority owned companies’ set by the Denver’s city laws. BAE had to

hire outside contractors to meet this requirement at an additional cost of $6 million. BAE

also later lost the maintenance contract after a strike of millwrights and electricians because it

only wanted to pay $12 per hour for jobs that the union demanded $20 per hour for.
(Bartholomew, 1994)

11
7. Software and mechanical glitches. When tested, the system had many problems. The

software that controlled the movement of telecars sent empty cars back to the waiting pool

instead of terminal building. The “jam logic” software shut down the whole loop instead a

section of track behind a jammed car. Dirty optical sensors caused the system to believe that

a section of track was empty when actually it was not. Jammed cars jumped the track and

bent the rails. Cars dumped luggage onto the tracks or against the tunnel walls because of

faulty switches.

8. Legal troubles. A federal grand jury conducted an investigation into DIA. The SEC

investigated the sale of $3.2 billion bonds to finance DIA. The General Accounting Office of

the Congress investigated the use of Congressional funds. The City of Denver insisted on

holding BAE responsible for failing to deliver the original system. The city and various

airlines hired law firms to prepare future litigations. Denver major demanded a $12,000 per

day penalty for missing the original opening day and the cost of building a conventional

back-up system.

Due to the problems encountered in building the baggage system, the opening of DIA was

delayed several times. A show of the system in April 1994 ended in a public disaster as the

system chewing up luggage and scattering piles of disgorged clothes and other personal items

beneath the tracks in front of the invited reporters. Apparently, something had to change in order

to salvage the project and eventually open the airport. The City, BAE, United and other airlines

renegotiated the terms of contracts and devised some solutions.

1. Management problems. To reduce the duplicity in leadership, the City of Denver assumed

the policy, financial and legal responsibilities and delegated technical part of the project to the

consultants. For the baggage systems, negotiations among the City, BAE and the airlines also

12
brought changes in the organizational structure. UA hired a construction manger with full

authority to make decisions and a consulting firm for further assistance. BAE hired its own

consultant to develop test plans and prepare commissioning documents. It started to work with

people who understood the technology and its needs. It signed a new contract with the United.

They formed a team of people with the same goal and developed a proper schedule. (Neufville,

1994)

2. Technical problems. The City hired a German consulting firm “Logplan” to assess the

automated baggage system. Logplan isolated a loop of track and identified many problems.

However, the system did not run long enough to determine whether there was a fundamental

design flaw or to find where actually the problems were. Logplan nevertheless recommended

construction a backup system to the automated one. To reduce the probability of misreading the

destination of each bag, more laser readers were installed. More controllers were added to slow

down the carts, reduce misalignments with the conveyors feeding bags, and minimize the

momentum that tossed bags off the carts. However, these solutions resulted in increased costs,

reduced performance, and lower cost-effectiveness of the system.

3. Complexity problems. To reduce the complexity to a manageable level, Logplan also

recommended the configuration to be drastically simplified. Only one concourse used by the United

would be served by the automated system. Each track would be operating at half the planned

capacity. The system was only to handle outbound baggage at the beginning, and inbound bags later

and would not deal with the transfer bags. As a result, the stability of the system was dramatically

improved.

4. Legal problems. BAE countered with a $40 million claim against the City. It claimed that

the whole DIA project was behind schedule and constant design changes made it impossible to

install the original system. It also alleged that the City limited BAE’s access to sites, delayed

13
permits, did not build the space to house the system on time and broke contractual promise to

make the baggage system the top priority by allowing other works to take precedence.

(Dempsey et al, 1994)

5. At the end, BAE’s automated system was only installed for Concourse B, which United

occupies. A conventional baggage system designed around conveyor belts and propane-powered

tugs and carts was built to service other airlines in Concourses A and C. The automated system

also has a complete independent backup system built with the conventional technology.

E) Economic Impacts

The original budget of the automated baggage handling system was $193 million. In the

end, close to $311 million was spent on the project. The automated system failed in initial tests

and, under pressure from the media and the public, the City of Denver was forced to build a

manual system. The cost of the manual system was approximately $80 million. Additional costs

of more than $100 million were needed to change the design of the terminals to meet the needs

of the baggage system. This must have seemed like a small over run when you compare that the

total DIA project went over budget by approximately $3.2 billion dollars. The additional monies

that were spent were largely due to delays in the overall project. Of course the baggage system

was a catalyst for most of the delays. (Dubroff, 1994)

So where did the money come from to support this overrun of costs? A major portion of

the capital came from the issuance of bonds. The citizens and businesses of Denver were

promised that not a single penny would be taken from any Denver residents, through an increase

in taxes, to pay for this project. This left the city with only a few options. They chose to issue

bonds to raise the necessary capital for the project. Initially this worked but as the delays

mounted the city tried to issue more bonds to cover the rising costs. This led to the original

14
bonds reaching a near junk bond status. The city was forced to offer higher interest bonds to

attract new investors. Towards the end of the project, it was costing the city approximately $1

million dollars each day the airport was not open.

To recoup some of its losses DIA filed a formal dispute to have BAE, the company

contracted for the automated system, pay for the costs of the manual system. DIA complained

that the problems from BAE’s system made the $80 million manual system necessary. BAE, on

the other hand, felt as though their work could not be completed due to a break in the contract

that allowed unrestricted access to the terminals. Other contractors were getting in the way of

the BAE project team.

DIA also is charging each airline a high passenger flight fee. Typically the charge is

around $5 to $8 per passenger. DIA is charging $20 per passenger. This cost is then passed on

to the customer in the form of higher ticket prices. The passenger fee for Denver is almost 3

times as high as other airports in large cities. (Ayres Jr, 1995)

F) Conclusions

Obviously there are many issues that caused the demise and delays of this project. DIA

did not have the luxury of reviewing years of methodology. Although similar projects existed,

none were of the same size and complexity as the DIA’s automated baggage system. They

couldn’t research to see how others had planned and implemented such a system so that they

wouldn’t make the same mistakes. Some of the keys areas for the project delay are:

Planning: The project management team needed to do a better job of planning prior to

the start of the project. Gathering as much data as possible for a project this size would lead to a

better decision-making process. The simple fact that the automated baggage system was

designed after the airport construction had already begun was a major roadblock. Planning for

15
the automated baggage system needed to take place during the original design of the airport.

Management did not fully understand the complexity of the system. Adding to this was the fact

that the consultants that were hired to develop specifications of the system had no direct

responsibility to the other teams that would do the actual development of the system. BAE had

to change its working structure to conform to DIA’s project management team.

Time: Time was another factor that caused major problems. BAE was forced to attempt

to complete their system in such a tight schedule that they did not even have time to review their

designs to see if they actually worked. BAE complained numerous times of the actual project

scheduling. However, the city of Denver took the stance that BAE had committed to this

timeline in the contract and, therefore, should deliver it within the time allotted. Most estimates

show that a high percentage of large size system projects overrun their schedules. BAE was not

free of blame. BAE should have been aware of these aggressive timelines before they agreed to

construct the system. At the time there were no other systems of this magnitude. Based on its

size, the project has been estimated to be about 100 times more complex then comparable

systems elsewhere. BAE was responsible for knowing that they would need ample time to test

the system under many different circumstances.

Communication: A lack of communication between DIA airport designers, city officials,

the airlines and BAE further plagued this project. To put together a formalized plan, the

stakeholders for each group needed to meet to construct a proper plan. This never happened.

The entire communication process seemed to be a top down approach. High-level management,

who had little or no understanding of the project, made the key decisions along with a few

consultants. DIA did not heed the advice of others. BAE’s original overconfidence that it could

16
complete the project by the specified date coupled with the city of Denver’s high expectations

and demands let to the overall breakdown of communication between the parties.

Any airport trying to construct a similar system should start by reviewing these three

main points before the project is to start. Using the advice of scholars and industry leaders will

also help gather the necessary information to build a formal methodology. Anticipating that

there will be problems and when they might occur will help in the planning phase. Adequate

time needs to be given to work out the so-called “kinks” in the system. This may include months

and even years of testing. There can be a direct correlation between a project’s complexity and

schedule. The more complex the project, the more time needed to complete the project.

Realizing this and building a highly skilled project management team is the key to the success of

a project.

Statistics show the history of IT project failures and the automated baggage system for

DIA backs some of those stats. For instance, IBM consulting group estimates that 55% of large

distributed systems cost more than what is budgeted. They also show that 68% of these systems

are not completed on time. The Standish group found that 31% of IT projects are canceled

before completion. Based on the information presented above we can see why software

implementation projects are among the most difficult projects for a business today.

17
 References:
Schloh, M. (1996). Analysis of the Denver international airport baggage system.
Retrieved Feb. 11, 2005, from
http://www.csc.calpoly.edu/~dstearns/SchlohProject/csc463.html

Neufville, R. (1994). “The baggage system at Denver: prospects and lessons,” Journal of
Air Transport. pp. 229-236

Donaldson, A. (1998). A case narrative of the project problems with the Denver airport.

Old meets new in the new west. (n.d.). Retrieved Feb. 7, 2005, from Application
Profile: Denver International Airport Baggage System Web site:
http://www.protectowire.com/applications/profiles/denver_airport.htm.

Bartholomew, D. (1994). InformationWeek. Rocky Start For Airport, March, 15.

Dempsey, P. (1994). Denver international airport: lessons learned. : McGraw-Hill

Companies

Dodge, J. (1994). PC Week. Architects Take a Page From Book On Denver Airport-bag
System, 3.

Ayres Jr, B. D. (1995). New York Times. "Finally, 16 Months Late, Denver Has a New Airport."
, March, pg 12A.

Dubroff, H. (1994, March 1).Airlines can't bear cost much longer. Denver Post

18