One problem with reinstating the system now is that so much business travel is on very short notice.

AFAIK airlines already use machine-readable luggage tags. I think your third answer — airlines don’t care — is the correct one. It’s not that they don’t face competition but that they don’t (yet?) compete on their luggage service.

The fact that govt controls many parts of airport operation is, I think, a red herring. Govt also controls security checks, yet some airlines do what has to be done to keep passengers from waiting too long (e.g., Southwest at BWI has its own employees stationed around the security screening area).

I’ve long wondered why FedEx doesn’t direct some of its marketing toward air travelers. FedEx Ground service is inexpensive, lets you insure your luggage for full value, and offers great convenience (home pickup and delivery) as a tradeoff for the added cost of shipping as opposed to checking your bags. Also, there are often FedEx facilities at large US airports. Partnerships between shippers and rental-car and hotel companies might also make sense.

I use FedEx or UPS to ship luggage all the time. Not only is it more reliable, it makes clearing security, customs, etc. easier. And if you declare the actual value of what you ship, you can that back.

For US travel, I try to ship a day or two early. That way I can use FedEx Ground/UPS Ground — much cheaper.

I don’t understand why airlines are unable to keep track of checked baggage. Shipping companies seem to be able to do it with many fewer errors.

I’ve wondered about this myself. I think couple of factors might dominate:

(1) Unlike shipping companies, airlines cannot mandate a large, standardized machine readable label on every piece of luggage. The marvelous efficiency of shipping companies today largely depends on those labels. If shipping companies relied on tiny, often hand written tags, read by humans to route packages, they would suck to.

(2) Government control. Airlines must operate out of facilities usually designed and operated by governments. They can’t build their own baggage handling system from the ground up. They have to shoehorn their own ideas and procedures into existing systems. Worse, every airport is pretty much a custom job. You don’t see anything like the level of standardization seen in the facilities of shipping companies.

(3) Like most customer service complaints, airlines just don’t care. Airlines still don’t face competitive pressures like other industries and, frankly, the tremendous speed advantage of air travel consistently trumps all other factors in market place. People will put up with a lot bad service to get places quickly.

I think an obvious improvement. is to create a standardized system of machine readable RFID tags that could be clipped to luggage. That at least would get rid of the primitive labeling and routing system. I also read about one business traveler who seriously suggested shipping one’s luggage via Fedex and just carrying on a few immediately necessary items on the plane.

1)I was stuck in France without any luggage for a couple of days because BA had lost it.
2)On a flight from London to the US, the airplane, which had been baking in the sun, had no ground A/C connected, and the on-board A/ wasn’t running. It was an hour or more of heat-soaked misery. I suggested to the cabin crew that they at least ask passengers to pull their shades down to keep the sun out, but this evidently wasn’t in their procedures manual.