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Airport Baggage Handling Systems Market

Global Airport Baggage Handling Systems Market: Information by Airport Capacity (Up To 15 Million, 15-25 Million, 25-40 Million, Above 40 Million), and Region—Forecast Till 2032

Report Code: SRAD55390DR
Study Period 2020-2032 CAGR 14.4%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 1.3 billion
Forecast Year 2032 Forecast Year Market Size USD 4.6 billion
Largest Market Asia-Pacific Fastest Growing Market North America
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Market Overview

The global airport baggage handling systems market size was valued at USD 1.3 billion in 2023 and is projected to reach a value of USD 4.6 billion by 2032, registering a CAGR of 14.4% during the forecast period (2024-2032). The demand for better and more efficient baggage-handling systems has led key players to develop smart baggage-handling systems, creating opportunities for market growth.

The airport baggage handling system is a conveyor system that enables the transfer of checked luggage between ticketing counters and aircraft loading gates. This indispensable system serves multiple functions, i.e., bag tracking, load distribution, volume management, and stringent luggage security screening. The BHS has cutting-edge devices like barcode scanners, radio frequency sensors, Automatic Jam Readers (AJR), tilt tray sorters, Automatic Tag Readers (ATR), and vertical sortation units. These cutting-edge components collaborate to ensure travellers' efficient and transparent baggage handling while reducing the workload of ground staff. The significance of a robust and sophisticated BHS cannot be overstated as the number of passengers using airports rises. A well-designed and efficiently implemented system prevents bottlenecks and delays and plays a crucial role in airport security.

Top Highlight of Report

  • Above 40 Million accounts for the largest market share by airport capacity.

Market Dynamics

Market Drivers

Increasing Air Passenger Traffic

The increasing growth in worldwide air passenger traffic is a significant driver for the airport baggage handling systems market. As more passengers fly, airports must modernize and increase their baggage handling capabilities to ensure that luggage is processed efficiently and on time. The International Civil Aviation Organization predicts a 100 percent increase in global air travel by 2030. With hundreds of millions of people joining the global middle class, the demand for air travel is experiencing an unexpected spike.

Similarly, the International Air Transport Association (IATA) reported that the recovery in air travel continued in December 2023, with total 2023 traffic coming closer to meeting pre-pandemic demand. Total traffic in 2023 increased by 36.9% compared to 2022. Global traffic for 2023 was 94.1% of pre-pandemic levels (2019). Total traffic in December 2023 increased by 25.3% compared to December 2022, reaching 97.5% of the December 2019 figure.

Moreover, the airport has invested in an automated luggage handling system that includes high-speed conveyors, improved sorting equipment, and real-time tracking via RFID tags. This system can handle up to 30,000 bags per hour, ensuring that luggage processing runs smoothly and efficiently, even at peak times. The updated system has dramatically reduced baggage mishandling rates and passenger wait times, highlighting the importance of advanced baggage handling systems in supporting increased passenger traffic.

Market Restraints

High Initial Investment

Implementing modern baggage handling systems necessitates substantial financial investment in technology, infrastructure, and an experienced workforce. As a vital component of this infrastructure, Baggage handling systems are anticipated to cost between USD 150 billion and USD 225 billion this decade. Technology adoption adds to the appeal of the airport baggage handling systems market.

Furthermore, the cost of an airport baggage handling system (BHS) varies according to its type and complexity. For example, in December 2022, Denver International Airport's Checked Baggage Inspection System (CBIS) will cost about USD 160 million. The CBIS is a complicated network of conveyor belts used to classify and track luggage during security screening. These high expenditures can be prohibitive, particularly for smaller airports or those in underdeveloped countries, restricting their capacity to implement advanced equipment.

Additionally, the new Istanbul Airport incorporated cutting-edge luggage handling technology. According to GlobalData's building project database, 71 airport development projects began in 2021. These projects have a combined value of about USD 50 billion. This figure represents, shockingly, over half of the 159 projects costing a total of £110 billion in 2021. Through 2022, terminals will account for 68% of all projects, either expansions or new developments, with a total investment of more than USD 42 billion. Such a significant expenditure is required to assure the efficiency and dependability of the baggage handling procedure. However, the substantial financial investment can be prohibitively expensive, particularly for smaller airports or underdeveloped nations that may lack access to the necessary finance.

Market Opportunity

Growing Demand for Smart Baggage Handling Systems

Many airports are implementing RFID technology for luggage tracking and management. RFID tags are applied to luggage, enabling real-time monitoring during baggage handling. RFID labels are placed on luggage at airports and contain information that allows the unique identification of the passenger, origin, and destination of the suitcase. These tags generate radio signals detected by strategically placed RFID readers throughout the airport, allowing real-time luggage tracking as it passes through certain checkpoints, such as check-in kiosks, conveyor belts, and loading zones.

Furthermore, in April 2024, FTE Digital, Innovation & Startup Hub members and FTE Baggage Innovation Working Group met at the Lufthansa Aviation Center at Frankfurt Airport for the largest-ever joint meeting of FTE's Innovation Communities. Lufthansa Group, Fraport, NXP, Avery Dennison, and Bob gave talks on automation, Artificial Intelligence (AI), RFID, and luggage tracking. This highlights the usefulness of intelligent luggage handling devices in minimizing mishandling while increasing operational efficiency. Stansted Airport in the United Kingdom recently completed a £70 million overhaul to its luggage handling system, which included the installation of 2.4 kilometers of conveyor belts and track and 180 automated carts to boost productivity. 

For example, in June 2022, SITA, a Swiss information technology business, partnered with Alstef Group to launch Swift Drop, a self-bag drop solution. The new technology reduces the time necessary for airport baggage checks. It lets passengers print their bag tags and load their luggage onto the accessible conveyor. Similarly, photo tag reading technology speeds up baggage handling. Such advances by market participants are expected to improve airport baggage operations in the following years, opening up market growth opportunities.

Regional Analysis

The global airport baggage handling systems market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific's airport baggage handling systems market share is estimated to grow at a CAGR of 14.8 % over the forecast period. Asia-Pacific held the largest market share due to the much larger population of China and India, which were driving the aviation industry and air traffic in both countries. The Chinese New Year celebration has recorded the most significant movement of humans in modern history, driving the need for new airports and improved BHS. In January 2024, China had 259 certified civil and 106 certified general airports. The number of civil airports in mainland China has gradually increased during the last 20 years. In addition, China plans to have 270 civil airports by 2025, expecting more than 930 million passenger traffic, 9.5 million tonnes of cargo parcels, and 17 million take-offs and landings annually. With such a vast number of airports under construction, there is a massive demand for baggage handling systems.

Moreover, ongoing initiatives are being implemented to expand airports in various nations. By the end of 2022, more than USD 1.3 billion investment will have significantly upgraded Delhi airport. The airport aims to boost its capacity from 20 million passengers annually to 40 million. Some of the extensions that are being considered are the creation of a fourth runway, the promotion of Terminal 1, and other improvements. All these factors are expected to drive the regional market growth.

North America is anticipated to exhibit a CAGR of 15.0% over the forecast period. In 2023, US airlines flew around 862.8 million passengers on domestic and international routes. This figure indicates an increase over the 750.6 million domestic passengers handled in 2022. With such a high number of passengers utilizing air travel, the demand for baggage handling systems is significantly high in the US. It is expected to grow exponentially during the forecast period. Moreover, airports are gearing up with expansions and infrastructure investments to better position themselves to tackle the projected increase in demand. As a result, government investments were also witnessed in the region.

For instance, the government of Canada announced support packages for investment in upgrading the infrastructure at Toronto Pearson International Airport in March 2022, with new funding for critical infrastructure projects. As part of this, the airport is expected to receive more than CAD 142 million from Transport Canada's Airport Critical Infrastructure Program. This investment will be used to develop and install new check-in and baggage drop-off counters and boarding counters to improve the baggage handling capabilities of the airport.

Europe is expected to grow significantly because of the surging air passenger traffic. According to the World Bank records, France recorded 71.28 million passengers using air travel as of 2019. However, this figure dropped to a low of 24 million in 2020, considering the international events in France every year. This led to a slump in the airports' economy and reduced market opportunities for the baggage handling systems market. However, with the projected increase in air travelers, airports nationwide are gearing up and upgrading their facilities to serve the market.

Despite the slowdown due to the pandemic, developments concerning improving the baggage handling systems have been underway for European airports. For instance, in June 2020, Leonardo was awarded a contract by Frankfurt Airport Services Worldwide to install a baggage handling system with safety and sorting capabilities at the new Pier G of Terminal 3 at Frankfurt Airport. With its two Multi-Sorting Baggage Handling System (MBHS) cross-belt sorting machines, the system can handle the bags of approximately five million passengers annually.

Latin America holds a significant market share. Brazil dominated the Latin American market. Brazil witnessed a significantly high number of passengers until the year 2023. In 2022, Brazil had 97.9 million air passengers, 82.13% of the 119.4 million passengers in 2019. This includes 82.2 million domestic and 15.7 million overseas travelers. By 2023, the number of passengers had risen to 112,622,060. For instance, Brazil has taken innovative initiatives to overcome the existing drawbacks of baggage security checks at Brazilian airports. 

In addition, in June 2022, Brazil introduced new baggage security screening regulations in which screening through X-ray machines would be a significant introduction. The authorities are also introducing an automated baggage security system so that there is no delay in baggage delivery to passengers after the flight landing. Also, it has been noticed that the automated system will be more efficient in managing baggage than human management.

Report Scope

Report Metric Details
By Airport Capacity
  1. Up To 15 Million
  2. 15-25 Million
  3. 25-40 Million
  4. Above 40 Million
Company Profiles Daifuku Co. Ltd. Alstef Group Siemens AG CIMC TianDa Holdings Co. Ltd G&S Airport Conveyer Vanderlande Industries BEUMER Group Ansir Systems SITA Leonardo SpA.
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Singapore Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global airport baggage handling systems market is segmented based on airport capacity.

Based on airport capacity, the global baggage handling systems market is bifurcated into 15 million, 15-25 million, 25-40 million, and above 40 million. The above 40 million segment dominates the global market and is anticipated to exhibit a CAGR of 14.28% over the forecast period. The number of airports entering the above 40 million segment has increased over the years due to the steep growth of air passengers globally. These numbers are expected to rise further by 2023 as several airports expand their passenger handling capacity through infrastructure expansion. Many airports are installing advanced baggage handling systems to attract more passengers.

For instance, in December 2021, a new baggage handling system (BHS) was introduced at Shenzhen International Airport, China Satellite Terminal. The primary part of the BHS was installed in a new satellite expansion north of Terminal 3 and is designed to accommodate an additional 22 million passengers per year. These airport expansion projects are anticipated to create demand for new baggage handling systems to efficiently process passengers and baggage within the airport.

Airports with a passenger handling capacity of 25-40 million have grown, with new airports entering this segment from the 15-25 million segment. This is mainly due to the investments to increase airports' passenger handling capabilities through terminal expansion and modernization. Airports such as Paris Orly Airport, Seattle-Tacoma Airport, Houston George Bush Airport, Shanghai Hongqiao Airport, and New York JFK International Airport fall in this category. Such airports are expanding to accommodate the increasing number of passengers.

For instance, in February 2022, New Terminal One (NTO) is a passenger terminal set to be built at the John F. Kennedy (JFK) International Airport in New York, United States, as part of broader plans to transform JFK into a world-class airport. NTO infrastructure will include 23 new gates upon completion. The first new gates of the terminal are anticipated to be opened in 2026. The entire project is expected to be completed in 2030. The installation of electric-powered ground service equipment, including baggage tractors and belt loaders, will be done at the new terminal.

Airports connecting small cities and islands often fall in the higher than 15 million. Several new airports will be opened over the next decade to enhance regional connectivity in several countries. This will significantly generate the demand for baggage handling systems over the next few years. Smaller airports with up to 15 million passengers are running over total capacity owing to ease of travel in many countries post-pandemic. Consequently, in January 2022, Malaysia's airports observed a surge in passenger traffic. The airport in Malaysia has a capacity of 3.11 million passengers. The international passenger movement in Malaysia skyrocketed by 114%, owing to the resumption of Umrah travel or Islamic pilgrimage and the Vaccinated Travel Lane (VTL) program between Malaysia and Singapore. This increasing number of airport passengers is expected to make significant investments toward optimizing the airport operations anticipated during the forecast period, generating demand for advanced baggage handling systems from this category of airports.

Market Size By Airport Capacity

Market Size By Airport Capacity
  • Up To 15 Million
  • 15-25 Million
  • 25-40 Million
  • Above 40 Million
  • Recent Developments

    Key Players

    Airport Baggage Handling Systems Market Share of Key Players

    Airport Baggage Handling Systems Market Share of Key Players
    Daifuku Co. Ltd. Alstef Group Siemens AG CIMC TianDa Holdings Co. Ltd G&S Airport Conveyer Vanderlande Industries BEUMER Group Ansir Systems SITA Leonardo SpA. Others

    Frequently Asked Questions (FAQs)

    How big is the airport baggage handling systems market?
    The global airport baggage handling systems market size is projected to reach a value of USD 4.6 billion by 2032, registering a CAGR of 14.4% (2024-2032).
    Asia-Pacific is the most significant global airport baggage handling systems market shareholder and is estimated to grow at a CAGR of 14.8 % over the forecast period.
    Top 10 verticals adopting the airport baggage handling systems market include: Daifuku Co. Ltd., Alstef Group, Siemens AG, CIMC TianDa Holdings Co. Ltd, G&S Airport Conveyer, Vanderlande Industries, BEUMER Group, Ansir Systems, SITA, Leonardo SpA.
    Construction of new airports and expansion of existing airports and growing terrorist attacks are the key driver for the growth of the global market.
    Growing demand for smart baggage handling systems is one of the upcoming key trends in the global market.

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