Business
Lost luggage showing signs of recovery
Baggage mishandling rates last year hit the highest in a decade globally as the airline industry scrambled to recover after the pandemic, a report shows.
Some 26 million pieces of luggage were lost, delayed or damaged in 2022 – nearly eight bags in every 1,000.
But new data seen by the BBC indicates the situation is improving as passenger numbers return to pre-pandemic levels.
This was down to more airport staff and automation technology, said Sita, which handles IT systems for 90% of airlines.
But that is no consolation to Chloe, whose bag got lost when she flew from the UK to Italy for a friend’s wedding.
Instead of sightseeing, the 27-year-old from Croydon said she spent the first hours of her holiday frantically running around the shops in search of emergency toiletries and clothes.
“It was a lot of stress I didn’t particularly want on my first holiday since 2014,” she said. “It also tainted the experience of seeing my friend get married… which is a once-in-a-lifetime opportunity.”
Chloe flew from Gatwick to Pisa with EasyJet on 1 August but her suitcase did not arrive on the baggage carousel. She filled in paperwork at the airport but then had to jump on a train to Florence where her friend was getting married.
Chloe said she was thankful she had packed her outfit for the wedding in her hand luggage.
“But there was the rest of my holiday and events around the wedding like a barbecue and a pool party where I didn’t really feel comfortable having photos taken with me in the same outfit all the time,” she said.
EasyJet has apologised to Chloe and said it will keep looking for her bag for 45 days before changing its status from delayed to lost.
“That means I’m in limbo because I can’t put a claim in for compensation from EasyJet or my travel insurance until they say it’s lost,” she said.
Chloe said the total value of her case and its contents was about £1,000. “Some of it I’ve already had to buy again because there are things I need on a day-to-day basis so I’m already out of pocket,” she said.
“You do get £25 per person per day for up to three days from EasyJet for toiletries and basic clothing. But that doesn’t go very far.”
The UK watchdog, the Civil Aviation Authority, said the maximum most airlines pay out is about £1,000 but added: “It would be very rare for you to receive this much.”
It also warned that airlines judge the value of an item on its age when lost, not how much it costs to buy new, so it might be better to claim via travel insurance.
‘Baggage mountains’
Airlines must track every piece of luggage at various points during its journey using the barcode on the luggage tag, according to Sita.
Last year was the first summer that holidaymakers returned in droves after Covid travel restrictions were eased.
But many airports and airlines that had made cuts during the pandemic struggled to recruit staff including baggage handlers quickly enough.
The number of bags that were delayed, lost or damaged jumped to 7.6 pieces of luggage per 1,000 passengers in 2022, Sita’s latest baggage insights report found.
This was the highest rate since 2012 when the overall figure was 26.3 million – nearly nine pieces mishandled per 1,000 passengers. The figure before the pandemic in 2019 was nearly six pieces per 1,000 passengers.
The report found the increase in 2022 was down to issues during transfers from flight to flight, which accounted for 42% of lost, damaged or delayed baggage.
Nicole Hogg, Sita’s head of baggage said: “Post-pandemic we’ve seen staff shortages at the same time as a surge in passenger traffic.
“People are really anxious about travelling with baggage, we’ve seen that with the baggage mountains. I think what we want to do is put confidence back into passengers to travel with bags.”
Sita has shared its provisional 2023 data with the BBC although it cannot work out the rate until it has passenger data for the whole of this year.
The International Air Transport Association (Iata) said there were 4.5 billion air passengers in 2019 and estimates this year will see 4.4 billion.
In the first half of 2023, the number of mishandled pieces of luggage was 5.7 million, down from 5.8 million in the first half of 2019.
“The trend started to sharply improve from May to the end of July 2023, with fewer bags being misplaced despite strong growth in passenger numbers going into the summer,” Sita said.
Ms Hogg said airlines were using automation to prevent baggage mishandling and reunite people with lost luggage.
“The system is quite clever. There’s an algorithm that basically works out what’s the next best available flight, and that bag is then sent directly on that flight without any human intervention.”
She said it was very rare that a bag that went missing was not found and sent back to its owner.
“I think a bag that is lost or never reunited with the passenger is because the tag had come off and there was no name or phone number on it. But it’s less than a 1% chance – bags that are mishandled are always more than likely reunited with passengers,” she said.
A statement from EasyJet said “incidents of lost luggage are extremely low” and that it “has one of the best performances in the industry”.
For now Chloe can only wait in hope that she is either reunited with her bag or able to claim enough to replace it.
— Reports /TrainViral/
The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.
“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.
Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.
Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.
Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.
In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.
However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.
The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.
But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.
As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.
The USO is a potential sticking point for both the government and unions.
Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.
How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.
Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.
Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.
‘Unconditional commitment’
Mr Kretinsky has committed in writing to honouring the USO, but only for five years.
And after that, in theory, the new owners could just walk away from it.
However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.
“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”
Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.
Another potential stumbling block for the deal, however, is how the company will be structured.
Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.
Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.
To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.
It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.
If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.
Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.
“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.
“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”
Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.
The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.
Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.
“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”
He said if the management, union and employees work together, “we will be successful”.
Another concern is the potential break-up of the business.
The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.
Mr Kretinsky has promised not to split off GLS or load the parent company with excessive debt, although borrowings will rise if the deal goes through.
But he has a way to go to convince the CWU.
“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.
However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”
The union cannot stop this deal but the government can block it under the National Security and Investment Act.
Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.
Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.
Who is Daniel Kretinsky?
Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.
He then made serious money in Central and Eastern European energy interests.
This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.
He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.
The Czech businessman is worth about £6bn, according to reports.
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