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RFID baggage system undergoes testing

McCarran is first to be converted

BY ARNOLD M. KNIGHTLY
BUSINESS PRESS

McCarran International Airport is in the process of changing over its entire baggage system from the bulky, mistake-prone manual barcode system to what officials and industry observers hope is a nearly error-free radio frequency identification system.

While RFID technology has been used selectively in a few airports around the country, the nation's fifth-busiest airport is the first to do a total conversion to the decade-old technology. It is also being implemented at the Hong Kong International Airport.

The $50 million project is running a few months behind schedule, but not over budget, assure airport officials.

Sprint recently unveiled its wi-fi system to the city of Henderson municipal workers.

"The scale and the scope of the project is such that it requires a lot of different skill levels from a variety of people to make it work," McCarran spokeswoman Elaine Sanchez said. "Better for us to take the time and do it right than to speed into anything."

PILOT PHASE

The project, which began three years ago, is currently in its pilot phase at the north end of terminal one with three small airlines -- Champion Air, AirTran Airways and Alaska Airlines -- currently running on the RFID system. The read rates, which are currently at around 90 percent under the barcode scanner system, are coming in at 99 percent for the pilot program. According to Symbol Technologies Senior Director Jerry McNerney, as more airlines come online at McCarran, the accuracy levels will still stay near 100 percent.

"That it is the beauty of the technology," said McNerney, whose company is manufacuring the RFID tags for McCarran. "What it is doing is introducing a high level of accuracy to the process."

The next airline scheduled to come online with the program is Southwest Airlines, McCarran's largest carrier, which brought nearly 14 million passengers to the airport last year.

"It's just been a huge construction project," said Jim Lusche, vice president and McCarran project manager for Swanson Rink. "Then you've got to be able to transition the existing system to this new system. Those transfers, it's taking a little bit longer to work that out with the airlines to make the transfers."

Four separate companies were contracted for the multi-phased project: New York-based Symbol Technologies will supply the airport with more than 100 million RFID tags over the initial five-year, $25 million contract; Kentucky-based FKI Logistex is in charge of the new system's integration; Denver-based Swanson Rink is the construction engineers; while local firm Domingo Cambeiro Corp. is the architects.

One of the benefits of the new system will be to bring the operation of the single baggage system under the airport's control. Currently at McCarran, as at most airports, the airlines run their own baggage systems.

Each RFID tag will have the customer's ID, the airport's ID and the airline's ID encoded into the chip. The information will be read remotely by the reader at least four times: when the bag leaves the ticket counter, prior to going through an Explosive Detection System scanner, before it is a declared bag or an alarmed bag, then a final reading. The information is then loaded into a data base so it can be easily traced back to the last location it was scanned.

LOST BAGS, BIG MONEY

According to a report released March 21 by SITA, a software company for the airline industry, more than 30 million pieces of baggage were mishandled around the world in 2005, costing airlines $2.5 billion. Statistics gathered by the U.S. Department of Transportation says Southwest reported 383,240 mishandled bags in 2005, a 27 percent increase from the previous year while passenger traffic only increased 8 percent. Using an industry standard economic model that places the cost of each mishandled bag at an average of $87.50 -- customer service, manpower to track and find the bag, reship the bag, etc. -- it could have cost Southwest $33.5 million last year alone.

But while the RFID tags may prove to be more efficient and lower the rates of mishandled and lost bags considerably, the cost of 20 to 25 cents per tag makes the system cost-prohibitive for other airports and airlines. While airlines may save money in the long run, it would be hard for the cash-strapped industry to float the up-front finances needed to convert and upgrade to the higher-cost system.

"When you're getting accuracy rates between 99 percent and 100 percent, when you're able to introduce that level of accuracy to a baggage-reconciliation system," McNerney said, "you are seeing an incredible amount of financial savings."

With an RFID project never done before at an airport on this scale, everything had to be designed nearly from scratch. The automated system will take the baggage from the ticket counter and deliver it to a screening node, one of a half-dozen that are being built for the integrated system. The bag will then be sent to the proper airline. If it was alarmed by the EDS scanner, it will go to the hand-screening area run by the Transportation Security Administration.

aknightly@lvbusinesspress.com | 702-871-6780 x316

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