BAGTAG targets North American expansion, adds homing solution

Having secured a bridgehead in North America with its Alaska Airlines deal, BAGTAG is looking to grow quickly, both in terms of customers served and the type of offerings available.

The first unit in Alaska Airlines’ colors rolled off the production line recently and the companies were excited to show it off during the World Aviation Festival in Amsterdam last week. Some minor tweaks are still coming to the graphics – making the airport code lettering larger, for example – but the factory should have several thousand ready for distribution by the end of the year, as previously planned.

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A trial for extra tracking

For travelers who want even more details about their bag’s location in transit, BAGTAG has a new model under development. This one sits inside the bag and includes a homing device, allowing the passenger to know exactly where in the world it is. The hardware is configured to automatically deactivate when flying and then come back to life on the ground, pinging the home server with location details.

Read more: Alaska Airlines going digital to slash bag check-in time

This is a far more robust solution than the AirTags option many travelers are pursuing today. It also comes with increased challenges around how it operates and convincing airlines that it is acceptable. And given the recent drama with Lufthansa and AirTags, that may prove to be the biggest challenge. Followed by the monthly subscription cost to keep it online globally.

Eventually the company hopes to integrate the homing device model with the barcode version on the outside of the bag. For now, however, they operate separately.

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Expanding the footprint

Alaska Airlines took the lead for BAGTAG in the United States, but other US carriers also appear interested in the system. Southwest Airlines recently concluded a trial, and United Airlines also is reported to be looking at the solution.

More participating airlines should be good news for consumers, allowing a hardware investment to pay off on more flights. But it could (slightly) hamper the business case for airlines looking to justify making the tags free to frequent travelers.

Who’s buying?

Despite all the optimism about the hardware developments and operational benefits, cost remains a major consideration. Convincing consumers to purchase the hardware directly for the sake of maybe saving a couple minutes when dropping off a bag remains an uphill battle.

For Alaska Airlines the initial deployment will focus giving some away and selling other to very frequent fliers, a natural market. Beyond the first few thousand units, however, the company has an opportunity to get creative in funding the program, assuming it can capture some data on its impact.

Will travelers with the digital tags choose to shift share of flights towards Alaska Airlines because of the convenience of the tags? Capturing one more trip a year from a business traveler could be enough to justify the costs of giving the hardware away.

And even if they do not fly more, might having the tag shift perception of the brand and the associated loyalty program? If the company could demonstrate an increase in co-brand credit card spending among the bag tag cohort that could drive broader deployment, paid for either by Mileage Plan directly or in cooperation with the bank on a premium card. And grabbing the co-brand value is always a nice win.

More news from World Aviation Festival 2022

• Looking Beyond NPS as a customer satisfaction metric
• easyJet snags AirFi for digital inflight transformation
• Airlines see a renewed digital transformation push from IATA
• Can inflight Wi-Fi ever be profitable?
• BAGTAG targets North American expansion, adds homing solution
• AirFi LEO aims to alter the inflight retail landscape
• Pairing, casting and streaming: The next generation of inflight entertainment emerges