In 2025, the industry made its strongest progress outside the pandemic, even as passenger numbers rise. Mishandled baggage rates dropped 23%, a sign that digital transformation efforts are taking hold, according to a new report by SITA.

Despite the improvement, mishandling still costs the industry $6.3 billion annually. Each bag carries an average cost of $260. With net profit averaging just $8 per passenger, one mishandled bag wipes out the profit from more than 30 seats sold, and five erase the profit of an entire flight.

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Passenger volumes are rising faster than the infrastructure designed to handle them. In 2025 alone, SITS says that five billion passengers traveled globally, yet 24 million bags were still mishandled. Across the longer term, mishandling has fallen by close to three-quarters since 2007.

“Baggage is shifting from a logistical problem to a digital service,” said Nicole Hogg, Portfolio Director Baggage, SITA. “Passengers expect to know where their bag is at every moment, and they’re increasingly willing to help us track it. The next phase is about bringing the technology we already have to every transfer, every handler and every airport offering greater visibility and connecting every step of the journey. That’s how the industry earns the trust passengers now expect.”

The report pinpoints where the next gains can come from. Delayed bags account for around 70% of the total cost, most of it operational, in recovery, rerouting and delivery. For lost or damaged bags, up to 70% of the cost is compensation. Transfers remain the core mishandling driver at 39% of cases in 2025, down from 41% the year before.