Airport Baggage Handling Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The airport baggage handling systems market was valued at about USD 5.03 billion in 2020, and it is projected to grow to approximately USD 7.32 billion by 2026, with a CAGR of over 6.7% during the forecast period (2021 - 2026).

Due to the impact of the COVID-19 pandemic and the subsequent reduction in passenger traffic in 2020, the revenues of airports and airlines have been severely affected. This factor is expected to force the airport authorities and airlines to take a conservative approach toward investing in augmenting airport infrastructure, thereby affecting the market for baggage handling systems, at least in the near future.

However, the pandemic is expected to drive significant changes in the baggage handling process. The demand for contactless and self-service technologies on arrival and departure is expected to reflect in baggage handling operations as well. Some airports have invested in the installation and testing of new baggage handling systems such as self-service bag drops, RFID baggage handling and tracking solutions, disinfection of baggage either by aerosols or using UV light, and automated baggage handling systems.

As the passenger traffic recovers and the profit margins improve in the latter half of the forecast period, airport operators and airlines are expected to install advanced systems for efficient baggage handling and tracking to enhance passenger experience and ensure smoother operations, which is expected to drive the growth of the market during the forecast period.

Baggage mishandling has been one of the major challenges for aviation authorities over the years. However, focus on better baggage tracking procedures and the introduction of the recent IATA’s Resolution 753, which requires airlines to track bags at the four main touchpoints (make-up, loading, transfer, and arrival) across the journey, have helped reduce the number of mishandled bags over the last few years. Companies are investing in developing better baggage tracking technologies to obtain the data to comply with Resolution 753. Such investments are expected to drive the market growth in the years to come.

Scope of the Report

A baggage handling system or a BHS is a type of conveyor system installed in an airport that enables the transport of passenger baggage from the ticket counter areas to the area where the baggage is loaded onto the aircraft. A BHS helps in transporting the checked baggage, which is unloaded from the aircraft to the baggage claim area. The market is segmented based on aircraft capacity into up to 15 million, 15-25 million, 25-40 million, and above 40 million. The report also covers the market sizes and forecasts for the market in major countries across different regions. The market sizing and forecasts have been provided in value (USD billion).

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Key Market Trends

The Above 40 million Segment is Expected to Exhibit Significant Growth During the Forecast Period

There is a significant increase in the number of airports entering the above 40 million passenger handling capacity segment. This is primarily due to the growing investments in expansion by major airports to cater to future passenger traffic and reduce congestion. For instance, in October 2019, Hamad International Airport in Qatar announced its second expansion phase plan, which will include the expansion of Phases A and B. Under Phase A, the passenger handling capacity is expected to increase to more than 53 million passengers annually by 2022 and may further increase to more than 60 million passengers after the completion of Phase B. The passenger handling capacity prior to the start of the expansion project was about 35 million. Similar projects are ongoing in several other countries in different regions. Such airport expansion projects are anticipated to generate demand for new baggage handling systems that will allow efficient processing of passengers and baggage in the airport. Large airports that were existing in this segment are also trying to increase their efficiency to reduce delays due to airport operations and congestion. In this regard, Frankfurt Airport Services Worldwide selected Leonardo to install a baggage handling system for the new Pier G at Terminal 3 of Frankfurt Airport. The new system is capable of handling bags of about five million passengers annually with its two Multisorting Baggage Handling System (MBHS) cross-belt sorting machines. The new baggage handling solution, which will incorporate safety and sorting functions, will be implemented in two phases. In 2021, the BHS will be delivered and installed as a stand-alone system, while in the second phase, the system will be expanded and integrated with the airport’s wider baggage handling system. Such similar developments in larger airports may propel the growth of this segment during the forecast period.

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