Airline Baggage Rules Put Smart-Luggage Firm out of Business

luggage on baggage claim
Photo by Chalabala/iStock/Getty Images Plus/Getty Images

by David Millward, The Telegraph, May 9, 2018

A company which makes smart luggage that incorporates a phone charger and GPS system to track lost suitcases has ceased trading after airlines banned passengers from checking bags with built-in lithium-ion batteries.

Bluesmart, formed in 2014 with the support of a $2 million (£1.48m) crowdfunding campaign, has fallen victim to new safety rules imposed by many leading carriers who fear that the lithium-ion batteries pose a fire risk, especially when left unattended in the hold.  

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In the US, smart cases are banned from the hold unless the batteries can be removed. Some airlines allow smaller bags in the cabin as long as the power is switched off. Others, including British Airways, demand that the batteries be removed from checked luggage and carry on bags as well.

“The changes in policies announced by several major airlines at the end of last year — the banning of smart luggage with non-removable batteries—put our company in an irreversibly difficult financial and business situation,” the company said on its website. Bluesmart, which has sold an estimated 65,000 bags, which can cost up to £400, ran into trouble because removing the batteries entailed removing from the case four screws and unplugging three wires.

“After exploring all the possible options for pivoting and moving forward, the company was finally forced to wind down its operations and explore disposition options, unable to continue operating as an independent entity.”

At a glance | What counts as 'smart' luggage?

The company added that it will no longer provide warranty backing for anybody who bought their bags.

Tomi Pierucci, the company’s chief executive, angrily condemned the restrictions when they were introduced, describing them as an “absolute travesty”.

Other manufacturers of smart bags such as Away and Raden are in a better position because the batteries can be removed easily. However, doing so disables one of the key features, the electrically powered GPS system which enables passengers to track lost bags using a mobile phone.

According to Steph Korey, Away’s chief executive, there has also been confusion at airports where staff have banned smart bags - even those with removable batteries.

In recent years, a number of aircraft have been forced to make emergency diversions after lithium-ion batteries have caught fire in the cabin. The Civil Aviation Authority says the batteries are “very safe, but… if they are not treated with care or if they are abused or have a manufacturing fault, they can catch fire”.

It is not only restrictions at the "high tech" end of airline travel having an impact on passengers. Tighter restrictions on baggage size are imposing changes on travellers, but creating business opportunities for some companies.

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With some carriers even charging for use of the overhead bins, travellers are buying smaller bags – good news for luggage manufacturers.

Jay Sorensen, whose company IdeaWorks specialises in analysing the money airlines make from ancillary products, has noticed a sharp rise in smaller bags on sale in stores in the US.

The other big winners from shrinking carry-on bag limits are credit card companies offering travel perks for those who sign up for their more expensive products. For example, a number of airlines offer co-branded credit cards which afford passengers one free checked in bag per flight.

With annual subscriptions costing around $100 (£73), it normally only takes a couple of trips for the card to pay for itself. Delta, which charges an annual $95 (£70) subscription fee, signed up one million customers for its co-branded American Express card last year.

 

This article was written by David Millward from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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