RFID – Tuning into the potential of RFID

As airlines battle with baggage-handling, aircraft maintenance and lost passengers, radio frequency identification could provide a perfect solution, but at what cost? David Bicknell looks at the positives and negatives of RFID

Frequency Identification is one of the most anticipated technologies for business, offering a world of traceability beyond the ubiquitous bar code.

Like the bar code, RFID’s recent high profile has largely been driven by the retail sector, by companies such as
Wal-Mart and Tesco.

But research work into RFID’s future has demonstrated all business sectors can take advantage of RFID’s characteristics as a critical technology for asset tracking, especially the travel industry. Baggage-handling, maintenance and, ultimately, passenger-whereabouts, are just some of the applications being considered by all areas of the industry.

According to the International Air Transport Association, RFID offers significant benefits. For customers, it offers improved airport efficiency and provides better customer service, while the potential use of RFID in the baggage-handling environment results in fewer delays from no-show passengers, and fewer mishandled bags.

For airlines, RFID offers improved logistics management, with RFID tags able to be updated to reflect itinerary changes. The ‘read rates’ from scanners average 95%-99%, while bar-code accuracy averages 80%-90%. That means a reduction in the 20 pieces of baggage per 1,000 passengers mishandled each year.

For airports, RFID means better capacity utilisation, improved baggage service and efficiency. For airport shops, this will mean happier, less hassled passengers who’ll probably spend more.

Essentially, RFID is a technology incorporated into a silicon chip embedded in a tag that emits a radio signal, which can be read at a distance without needing to see the item. Tags can be ‘talked to’ or ‘written to’, allowing the status of an item to be updated as it is processed.

Although RFID’s roots go back to World War II, it took off commercially in 1999, when the Auto-ID Centre in Boston developed the idea of putting low-cost RFID tags on all products to track them through the supply chain.

It is this concept that has persuaded the trade to consider adopting RFID-based solutions to find cost savings in complex processes, while, at the same time, enhancing convenience for the consumer.

In 2004, IATA member airlines embarked on a programme called ‘Simplifying the Business’, designed to ease the transport of passengers and freight and deliver $6.5 billion in annual industry savings.

Simplifying the Business is comprised of five projects that together form an end-to-end simplified travel process:

  • 100% electronic ticketing by the end of 2007

  • Common use self-service kiosks for check-in

  • Bar-coded boarding passes

  • RFID for baggage handling;

  • IATA e-freight – freeing cargo of paper by the end of 2010

Although only baggage-handling is currently RFID-based, its potential long-term adoption will strike a chord with passengers who have experienced that sinking feeling as the number of people around the carousel diminishes – and their bag hasn’t arrived. 

Upon full implementation, RFID will improve baggage service and yield $760 million in annual industry savings. Andrew Price, IATA project manager for RFID, has helped drive the introduction of a new standard, RP1740c, which he believes means those airlines considering baggage-handling as a cost-saving area will have a better idea of how to do it.

“RFID is win, win, win for passengers, airlines and airports,” says Price.

Another key area for RFID is aircraft parts and maintenance, which can affect aircraft turnarounds. The cost of inefficiency – approximately $600 a minute when an aircraft is delayed – can be astronomic for airlines. These delays often occur when the airline is unable to retrieve parts from storage quickly.

Last year, Virgin Atlantic began using RFID to help track aircraft parts through its facility at Heathrow. The trial found that an RFID system can improve Virgin’s aircraft servicing by making the process of locating and replacing parts more efficient.

Andy McBain, EMEA RFID product manager for Motorola-owned RFID specialist Symbol Technologies, whose equipment was used by Virgin, and in RFID implementations at Las Vegas and Hong Kong airports, believes the challenge for travel organisations embracing RFID is not a technical issue, but an economic one. “There are a number of potential applications for RFID, but the key question is who is going to pay for the tags?”

Another potential RFID application for the online travel industry is in customer service. TUI perceptive director of new media, Graham Donoghue, sees RFID bridging the customer service gap between its website and the high street.

“There are still a lot of people who want to go into stores: not all bookings are done online. RFID can be the ‘digital engagement device’ that enables you to recognise who the client is, both at home and abroad. A lot of customers buy a flight and a hotel and think they’ve bought a package, when they haven’t. RFID can help identify who’s booked what.”

Another move has seen companies such as Mantic Point (Manticpoint.com) develop RFID solutions to make travellers’ lives easier at airports. Its StreamThru software offers a ‘virtual concierge’ experience, getting airlines closer to their passengers off-airport, through landside, security and airside, while rewarding passengers for sharing information on their whereabouts.

Henry Harteveldt, vice-president and principal analyst for travel research at market research specialist Forrester, agrees RFID offers enormous potential. However, for some key players, current business and cost issues will take priority over technology tomorrow.

“If you’re BA, you have other pressing things to worry about – low-cost airlines, industrial action – than the potential of RFID. Tag manufacturers will have to bring their costs down. Although there are potential process and cost savings through RFID, for many organisations they are not yet enough to offset the cost of implementation.”

Why use RFID?

RFID has a number of advantages over bar codes. These include the ability to read the label without having to have a clear line of sight to it, and to read a large number of labels at the same time. Plus, the tags don’t damage easily, as is the case with bar codes.

RFID technology is quicker and more efficient than using a bar code. It enables bags to be sorted and loaded faster and more accurately, so reducing the number of delayed bags and their cost.

Why not?

Cost issues. While the technology offers significant potential, the cost of tags and readers currently outweighs the savings. Many organisations have done RFID trials, but few will say with certainty that they are implementing it.
Privacy issues. Privacy campaigners believe RFID offers serious risks to individuals’ privacy. Shoppers trying on garments with an RFID tag, want the tag to be ‘dead’ by the time they leave the store. So tracking passengers – with their approval – around an airport? That’s a leap of faith.

What they say about RFID

Virgin Atlantic recognises the potential of RFID solutions in areas such as supply chain, baggage and a number of other applications and will be regularly reviewing the advancement of the RFID market. The trial that was carried out by Virgin Atlantic was a success and although there are no firm plans, the airline will be looking at ways we can utilise this in the business for the future.

British Airways remains interested in the possibility of using RFID tags as part of its baggage-handling process in the future. The airline welcomes ongoing IATA discussions on the subject and will continue to monitor trials of the new tracking system. However, it is vital that a single system is developed for all airlines and airports globally to reduce complexity and ensure success.

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