Delta Air Lines Inc. today announced that it plans to test the use of radio frequency identification (RFID) bag tags this fall on selected flights from Jacksonville, Fla., through its Atlanta hub -- a move seen by analysts and suppliers as potentially boosting the use of RFID bag tags throughout the airline industry.
Atlanta-based Delta said the 30-day test, conducted in coordination with the Transportation Security Administration (TSA), would involve more than 40,000 disposable 900-MHz RFID tags provided by Matrics Inc. in Columbia, Md., and SCS Corp. in San Diego. Delta's decision to test RFID bag tags comes a week after Wal-Mart Stores Inc. said it plans to require its top 100 suppliers to use RFID tags on shipping pallets and cases by January 2005 (see story).
Deepak Shetty, an analyst at Frost & Sullivan in San Jose, said he views the Delta test and Wal-Mart's embrace of the technology as catalysts for the widespread use of RFID, which "has been waiting for some killer apps" to become a reality.
John Shoemaker, vice president of business development at Matrics, agreed, adding that widespread use by the airline industry and retailers could lead to production volumes large enough to drive down prices for the tags.
Shoemaker said he can't discuss terms of the agreement with Delta, but he did say that Matrics can deliver the RFID inlays that Delta will use in the tags at a cost well below 50 cents per tag. He said the inlays will be embedded in standard bar-code tags, which cost 8 to 13 cents each. Shoemaker estimated that at large volumes, the cost of an RFID bag tag could drop to 20 cents within a year.
He estimated that Delta uses between 90 million and 100 million bag tags a year, out of an airline industry total of 1 billion a year.
RFID tags today sell for between 30 and 50 cents each, according to Bill Allen, a spokesman for Texas Instruments Inc. in Dallas. In 1999, British Airways PLC conducted a test that involved some 150,000 RFID bag tags on flights from Manchester, England, and Munich, Germany, to London's Heathrow Airport under the auspices of the International Air Transport Association. Allen said standards need to be adopted before RFID tags can be used throughout the international airline industry.
Rob Maruster, Delta's director of airport customer service strategy, planning and development, said in a statement that "by using RFID, we can further improve our baggage handling, provide real-time baggage updates and provide better, faster and friendlier service."
Shetty said RFID bag tags would provide better accuracy than bar-code tags, since bags can be tracked from a distance of up to 30 feet, whereas bar code tags have to be in close proximity to a reader.
Shoemaker said RFID tags will improve security by allowing the TSA to track bags with a high level of accuracy -- up to 99% -- as they move from check-in counters through explosives-detection machines and then onto aircraft.