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Chapter 5 Findings Eliminating or reducing baggage recheck is a highly complex set of issues with trade-offs related to volume, process, time, cost, and preserving the integrity of the U.S. border. Any solu- tion also has to weather the ever-changing threat dynamic for contraband, terrorism, and less malicious scenarios related to import of goods into the commerce of the United States. However, simplifying connections would offer significant benefits to traveler satisfaction, the sizing of facilities, and hub development opportunities that could improve the competitiveness of airports to capture international traffic. This chapter outlines the findings associated with eliminating or reducing baggage recheck. Stakeholder Analysis The introduction, or change, of a process or technology must be evaluated with an understand- ing of the impact to those involved. Table 3 outlines the intended benefits that the elimination or reduction of baggage recheck could have on the stakeholders/process owners involved. If successful, the benefits to each group are generally universal across the alternative procedures. It is important to note that the specific costs and benefits would vary greatly across the respective airports and airlines. Generic Impact Analysis To document the potential impact on the air transportation industry, an order of magnitude of benefits for eliminating baggage recheck is provided that was based on perceived savings to air- ports, airlines, and passengers. For each group, the impact was estimated for day-to-day operations, deferred or reduced capital costs, passenger convenience/value of travel time, and other benefits. Passenger and Bag Traffic As noted in Chapter 3, there are approximately 23 million connecting passengers processed annually by CBP at the 30 busiest airports. The impact analysis has been calculated based on the potential savings from facilitating all international arrival transfer bags (i.e., eliminating baggage recheck for international-to-international and international-to-domestic connections). Based on a ratio of 1.35 bags per passenger (as specified in the 2011 SITA Baggage Report), the approximate annual number of checked bags is 31 million. The peak-hour passenger traffic was estimated using the Federal Aviation Administration's recommended relationship for Typical Peak-Hour Passengers (TPHP) computations from 54

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Findings 55 Table 3. Stakeholder analysis of benefits of eliminating or reducing baggage recheck. Stakeholder Benefits Outbound baggage is available for sortation sooner Enhanced passenger experience for transfer process Air Carriers Reduction in mishandled bags leading to cost savings and improved schedule integrity Reduced staffing resources at baggage recheck facility Reduced/eliminated bottlenecks at FIS baggage carousels and/or baggage recheck facility Increased transfer passenger convenience Enhanced gateway/hub capabilities Airports Ability to use the baggage recheck area for other purposes Increased passenger time available for retail/food services Improved transfer experience--particularly for families, the elderly, and the infirm Passengers Reduced time in the FIS area Increased time for retail/food services TSA Potential spreading of passenger arrival at passenger screening checkpoint Improved passenger perception with elimination of baggage claim in FIS Spreading of passenger arrival at Egress officer position CBP Decreased congestion surrounding FIS baggage carousels Improved customer service Enhanced capacity to focus on those passengers/bags potentially presenting a risk annual figures. The ratio of 0.0350 percent peak-hour passengers to total annual passengers was used. Although the ratios vary based on total annual passengers, the category "30 million and over" was used because the average annual passengers at the top 30 U.S. airports is 35 million. Applying the ratio to the total connecting passenger and bag traffic, the peak-hour traffic that is currently impacted by baggage recheck is estimated to be 8,050 passengers and 10,868 bags. Savings in Day-to-Day Operations For each passenger who does not have to claim and recheck bags, the expected benefits are as follows: Time eliminated from claiming bags, waiting to exit the FIS area, and rechecking bags. Increased passenger convenience (less contact time with processes). Reduced baggage handling costs. Airport Staffing In terms of airport staffing, there is the possibility of improved savings for operations through baggage handling and customer service staff. However, there are highly variable orders of mag- nitude of airport operation costs savings depending on the type of baggage systems used. As a result, and to be conservative, annual airport operational staff savings have not been included as a net benefit. A potential cost, however, could be the requirement for dedicated baggage retrieval staff if an automated bag return system cannot be installed at a particular airport. Airline Baggage Recheck Staffing There are potential savings in the reduction of staff needed for baggage recheck. A signifi- cantly reduced number of bags required to be rechecked should allow airlines to reduce staffing requirements at recheck. Based on a very conservative estimate that eliminating two recheck staff positions for each of the top 30 airports could yield net savings of 60 full-time equivalents (FTE) and using a total FTE cost

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56Elimination or Reduction of Baggage Recheck for Arriving International Passengers of $80,000 per year, approximately $4.8 million in labor costs could be saved each year. Cost sav- ings could be much higher when the reduction of ramp staff who deliver baggage to claim carousels and handle baggage after recheck is also considered. Relative costs vary from facility to facility. Deferred Capital Costs and Equivalent Savings The elimination of baggage recheck has a profound impact on the planning parameters for international arrivals facilities. Hundreds of millions of dollars have been spent on new/expanded international arrivals halls in the past decade and billions more in construction or design stages. There is a potential to extend the useful life of existing facilities through improved baggage flows. The actual benefit will vary from airport to airport but could include the following: Improved utilization of existing space for today's passenger volumes, Deferred future facility expansion required for growth of passenger volumes, and/or Designs for less-expensive new facilities. Airport Baggage Carousel and Baggage Recheck Space A critical part of the FIS is the provision of baggage reclaim carousels. Airports plan their inter- national arrivals hall based on peak-hour aircraft and passenger arrivals. Depending on the bag- gage carousel system, these units typically handle 500 to 1,000 bags. The average cost of a carousel, in-feed conveyors, and the space that it occupies is at least $2 million. Based on peak-hour bag delivery to the claim carousels with an average capacity of 600 bags, the reduction in rechecked bags would remove the need for an estimated 18 claim carousels, offering a savings of over $36 million. Capacity would still be available to serve destination passengers in this scenario. Existing baggage recheck facilities and space could similarly be repurposed or future construction could be avoided. For each baggage claim carousel saved, it is estimated an equivalent 1,000 square feet of recheck space could be saved. With an average construction cost of $1,000 per square foot, this translates to approximately $18 million in recheck space savings. However, this number should be treated with extreme caution. For most international airports, there is no room to simply "add" a baggage carousel or recheck facility to achieve greater capac- ity. The addition of new carousels could trigger the need for an expanded/new FIS that could add hundreds of millions in costs, depending on the airport configuration. Passenger Convenience/Value of Travel Time Typically, a passenger will select an international connecting airport based on a select few conditions that include total travel time and passenger convenience. As concluded in Test 1, the elimination of baggage recheck should save passengers considerable amounts of time while in transit (about 25 minutes). The value to passengers of these time savings has been estimated using standard value of time calculations commonly used in the economic assessment of projects. The U.S. DOT Revised Departmental Guidance for the Valuation of Travel Time in Economic Analysis (6) provides a recommended average value of time for air travelers, in 2000 dollars. This valuation was adjusted to 2009 dollars using income data from the U.S. Census Bureau Current Population Survey tables of historical mean income per capita, an approach consistent with the original calculation of the value of time (the original U.S. DOT values were based on a percentage of hourly income). The resulting value of time was calculated to be $33.95 per hour, in 2009 dollars. The average time savings from not having to reclaim or recheck bags was conservatively estimated at 15 minutes per passenger for all airports. Based on 23 million enplaned passengers annually, the number of hours saved is 5.75 million with an estimated value of $192 million each year.