Why Airlines Keep Losing Your Luggage

[Scott & Lai 12]

http://biz.yahoo.com/weekend/lostluggage_1.html

Why Airlines Keep Losing Your Luggage

The Wall Street Journal Online

By Scott McCartney

And When They Do, the Size of the Payout Will Depend on the Carrier and Destination

When Delta Air Lines Inc. lost Andrew Shipman's Tumi leather rolling bag, he had no idea how costly it would be. Even though he had receipts for recently purchased clothing totaling $1,433, Delta still chopped $645 off his claim, citing "depreciation for prior use."

The hassle was eye-opening. "I was not aware of all the issues that you run into in these situations," says Mr. Shipman, a mutual-fund portfolio manager.

With air travel rebounding, and more fliers checking luggage because of security limits on liquids, airline baggage service is suffering. The lost-bag rate has increased every year since 2002. About one U.S. passenger in every 150 had a mishandled bag last year, up 11% from 2005. Financial woes have led to layoffs for thousands of baggage handlers and skimpy replacement of breakdown-prone equipment. Worst among major airlines last year: US Airways Group Inc., followed by Delta and AMR Corp.'s American Airlines.

When it happens, most people don't know what they're in for. You may think the airline will reimburse you for buying clothes for your big presentation the next day, but some offer only a bathroom-amenity kit for the first 24 hours you're without your luggage, then $25 a day for three or four days.

Among the more generous airlines, Northwest Airlines Corp. and Southwest Airlines Co. offer an amenity kit plus $50 on the first day of a lost bag. Continental Airlines Inc. offers up to $250 for emergency purchases if a bag is lost for more than a day; Northwest goes up to $150. At the other end, Frontier Airlines Holdings Inc. offers a kit for the first 24 hours then pays up to $25 a day for four days of temporary needs. US Airways and AirTran Holdings Inc. have a limit of $25 a day for three days.

Some carriers will pay only half the cost of replacement clothes. Some suggest renting clothes. (Some tuxedo-rental stores will rent business suits.) Alaska Airlines Inc. won't give cash to buy temporary items if your bag was lost due to weather.

"If people go out and replace a wardrobe without prior approval," says a spokesman for American, "that's going to create problems."

The federal cap on airline liability for lost baggage on domestic flights is $2,800 per passenger, not per bag. Beware: Airline ticket rules have lots of exceptions. Jewelry, cameras, business papers, cash, and other valuables aren't covered at all.

Liability for international trips is lower. Most trips overseas are governed by a treaty known as the "Montreal Convention," which caps airline liability at about $1,500 per passenger (the limit fluctuates with currency-conversion rates). But if you travel to or from nations that haven't fully ratified the 1999 Montreal Convention, including Argentina, Australia, Bahamas, Bolivia, Honduras, Israel, Singapore and others, then the 1929 "Warsaw Convention" applies at some airlines and liability is capped at $9.07 per pound, or $453 for a 50-pound bag. (Tip: If the Warsaw Convention covers your trip, it pays to pack multiple small bags rather than one big one since liability is per bag.)

When you file a claim, receipts are typically required for items valued at more than $250. AirTran wants a receipt for anything worth more than $100. Then "depreciation" kicks in. Airlines reimburse the actual value of the item, not replacement or original cost.

Mr. Shipman's five-year-old Tumi leather bag? It now costs $645 new, but Delta decided it was worth no more than $250 because he didn't have a receipt for it. The value of clothes also was depreciated. In the end he got $1,613 out of the $2,258 claim he filed. Seeking more explanation, he called Delta and says he was told he couldn't talk to the person who processed his claim, only fax questions to her. (Delta says claims agents do talk to customers all the time.) Mr. Shipman faxed a letter, and the claims agent replied that Delta was sorry he wasn't happy but considered the case closed.

"I'm amazed that the airlines can get away with operating with such little regard for their customers, especially when fault ultimately lies with the airline," Mr. Shipman says.

There are ways to protect yourself. Never check items you have to have within 24 hours -- medicine, for example, or the suit for the presentation in the morning. And when you do have a problem, insist on temporary help -- some airlines won't offer unless asked.

Most important, if the bag ends up permanently lost, remember that you may have more insurance than you realize. Many homeowners' policies offer some coverage for household goods away from home. Your credit card may also offer some protection. When you buy airfare on many cards, some travel insurance is included for baggage that is permanently lost, stolen or damaged. If that's not enough, most travel-insurance policies you buy to protect against trip cancellations or disruptions carry baggage coverage.

Randy Miller and three family members flew British Airways recently from their Oregon home to catch a Mediterranean cruise, missing three bags upon arrival. Six days into the cruise, one bag arrived. Three days later, they got bag No. 2. Bag No. 3 showed up back home in Oregon three days after the cruise ended. A fourth piece of luggage, lost on their flight home, arrived 11 days later marked "RUSH!" "My real beef was BA's failure to make a real or sympathetic person available by phone," says Mr. Miller.

British Airways said it has struggled with baggage at London's Heathrow Airport, its main hub, because an airport-owned baggage system has grown increasingly prone to breakdowns. A New Year's weekend breakdown left 10,000 bags piled up at Heathrow. The airline said reuniting bags with cruise passengers is particularly difficult.

For many travelers, the biggest frustration is that airlines can't tell you where a mishandled bag actually is, and when it might be returned. Airlines say the bar-coded tags put on bags at check-in are used to sort luggage at your departing airport, and for identification purposes. Some carriers scan bags down the line to track bags; many don't. Often they don't have a record of where the bag went.

Some airlines have tried bar-code readers on baggage belts, but the readers miss a high percentage of tags. Hand-held scanners work better, but slow loading. The answer, airlines say, will be radio-frequency ID tags that transmit a code like a car toll-paying tag and allow bags to be identified as they pass a baggage-belt receiver. For now, carriers say the tags and receivers are too expensive for world-wide deployment, but will become more affordable.