The Navigator: How the airlines handle the ‘mishandled’ luggage problem

Jaime Sigal’s suitcase felt a little light when he picked it up from the conveyor belt in Sao Paolo, Brazil, so he gave the heavy-duty ballistic nylon bag a careful once-over. Sure enough, the zipper appeared to have been forced open. Sigal, who works for an export management company in Miami, made a beeline for the LAN Airlines counter. Three items were missing from his luggage: a blazer, a leather jacket and boots. He’d paid a total of $1,700 for the items last year.

Every day, the same scenario repeats itself in airports everywhere. Luggage is lost or pilfered, and airlines do their best — or not — to find or replace it.

Last year, there were more than 2 million reports of mishandled luggage among domestic airlines, according to the Transportation Department. That’s down slightly from the year before, when roughly 2.1 million bags went astray. (While the government doesn’t distinguish among lost, damaged, delayed and pilfered baggage — referring to it all as simply “mishandled” — airline passengers certainly do.)

The biggest offender? Among the major non-regional carriers, American Airlines had the worst record, with 3.82 reports per 1,000 passengers. Interestingly, American was the first of the big carriers to institute a fee for all checked bags, back in 2008. The second- and third-most loss-prone were Delta Air Lines and Southwest Airlines.

The problem isn’t just lost luggage; it’s what happens next. The rules vary, depending on where you lost the bag and how long it takes to recover it.

Consider what happened to Sigal. After he filed a claim, LAN offered to pay him either $300 or cut him a $600 flight voucher. He refused both. “I feel that while in the custody of the airline, the suitcase was opened and the items were stolen,” he told me. “The reimbursement is not even close to the replacement cost of the items.”

Under the Montreal Convention, an international treaty that governs compensation for the victims of air disasters, Sigal was entitled to a maximum of about $1,800. (The amount fluctuates, because it’s based on a combination of worldwide currencies.)

I suggested that Sigal mention to LAN that its offer came nowhere near to what the Montreal Convention calls for. When he did, LAN asked for receipts for the stolen items, which he sent. The airline offered him about $1,800 in flight vouchers, which he accepted.

There isn’t always a happy ending, though. Earlier this year, reader Leonard Henderson contacted me after his ski gear got lost on a flight to Telluride, Colo. He had to buy new clothes, for which US Airways promised to reimburse him. But when the time came for the airline to pay up, it balked. Henderson had paid $2,500 for new gear, but the airline covered only $800.

“The airline will not give me an explanation of how they came up with the reimbursement figure,” he told me. “I feel like the tiny little guy versus the corporate giant.”

Part of the problem is that Henderson’s luggage was eventually recovered. According to federal law, the airline is liable for a minimum of $3,300 per customer if lost bags are never found.