The Asia-Pacific airport baggage handling systems market is estimated to grow at a CAGR of over 5.5% during the forecast period (2020 - 2025).
- Asia-Pacific registered growth in air traffic of over 4% in 2019. Low airfares, increasing business and leisure travel, improvement in living standards, and growth of the middle-class population and their income, are some of the major contributors to increased air travel in the Asia-Pacific region. The increased traffic growth in the Asia-Pacific region is leading to an increased demand for more efficient airport baggage-handling systems, and this is expected to propel the growth of the market during the forecast period.
- The increasing emphasis on airport security, as well as advanced technologies, in terms of passenger baggage screening, is expected to support the growth of the market in the years to come.
- Construction of new airports, as well as terminal expansion, is expected to provide further growth opportunities for the manufacturers of airport baggage handling systems during the forecast period.
Key Market Trends
Automation in Baggage Handling Systems is Driving the Growth of the Market
Baggage handling at small airports is a relatively simpler matter, whereas, in large airports, the process is far more complex and can have a significant impact on cost and quality of service. Increased passenger traffic has simultaneously increased the baggage volume, which is the primary reason for the adoption of automated systems at the airport. Baggage handling systems are being designed and modified to solve bottlenecks that occur during peak times. The automated baggage handling systems (BHS) used today are easing the pressure on airport ground support personnel and are helping the airport, airlines, and ground handlers to achieve better passenger service and satisfaction. The current baggage handling technologies range from sorting, tracking, and conveying systems to explosives detection and early bag storage and retrieval. The primary goal of the baggage handling system is to smoothen the entire process.
Automation has significantly contributed to reducing turnaround times. Accurate and efficient systems ensure that the right bag goes to the right aircraft for the right passenger. Aircraft turnaround is a major focus area for the airlines and is also related to passenger satisfaction. The baggage handling process can significantly impact aircraft turnaround in several ways. If these processes are unreliable, it could result in late or misdirected items of baggage and can ultimately delay the aircraft departure. Adding conveying and sortation technologies is usually the first step in the automation of a BHS. However, new regulations and government mandates have resulted in the integration of baggage screening and explosives detection systems with sortation and conveying technologies. Recently in July 2019, China Eastern Airlines introduced RFID for baggage tracking at Shanghai Hongqiao International Airport and Shanghai Pudong International Airport. The use of RFID has helped the passengers to get real-time information about their baggage at each stage of the baggage handling process. Likewise, the newly constructed Beijing Daxing International Airport has also introduced RFID for baggage tracking.
China Accounted for a Major Market Share in 2019
By the end of 2019, China dominated the Asia-Pacific airport baggage handling systems market. The number of air passengers in China has increased from 391.9 million in 2014 to close to 660 million by the end of 2019. China had a total of more than 230 civil airports by 2019, and China is planning to have a total of 450 airports by 2035, by building over 200 new airports in the next 15 years, to cater to the growing air passenger traffic demand. With such a huge demand for construction of new airports, there will be a significant demand for baggage handling systems from these airports during the forecast period. China is planning to build airports in the Beijing-Tianjin-Hebei region, the Yangtze River Delta region, the Guangdong-Hong Kong-Macau Greater Bay Area, as well as in the cities of Chongqing and Chengdu. The Chinese airports have boosted their IT spending with a focus on equipping new airports and terminals with the latest technologies and managing growing passenger numbers, by increasing both the passenger and baggage handling capacities, thereby, reducing the waiting times. With the increasing passenger inflow into the airports, there is an increasing focus on accurate, fast, and efficient baggage handling systems. In this regard, new, and technologically advanced baggage handling systems are being installed in several airports in China. In April 2019, Leonardo announced that its sorting technology was selected for the new Terminal 1 Baggage Handling System at Hong Kong International Airport. Following the contract for the airport’s ‘Primary Sorter Replacement’ program, the existing sets of legacy tilt-tray primary sorters and all associated hardware and software may be replaced by the Leonardo’s advanced MBHS (Multi-sorting Baggage Handling System) technology.
The Asia-Pacific Airport Baggage Handling Systems Market is moderately fragmented with several players. However, few companies account for a significant share. Some of the prominent players in the market are CIMC TianDa Holdings Co., Ltd., SITA, Vanderlande Industries, Siemens AG, and BEUMER GROUP. The industry saw a lot of market consolidation since 2016, due to the increased spending in software and IT solutions. Various contracts received by the players in the recent past have helped the companies to strengthen their market presence. For example, in March 2018, the Airports Authority of India (AAI) expanded its agreement with SITA, which will allow the company to install its baggage management solution, BagManager, at 15 airports across India. Once installed, BagManager is likely to provide the airports with real-time data on the status of passengers’ baggage, hence reducing the possibility of baggage mishandling. As the market demand improves with the growth in passenger traffic, it is expected that the smaller players will be acquired to gain competitive advantage, to cater to the needs of the customer.
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