AvX had a nice write-up in the respected Pacific Coast Business Times recently. I was interviewed last week by Stephen Nellis, their technology editor. He turned out to be an interesting guy, and made the process pretty enjoyable.
Find the bag, follow the money:
Tech veteran builds business on lost luggage
by Stephen Nellis
Pacific Coast Business Times
Friday, 3 September 2010
You’ve just stepped off an airplane in London. You’re tired and jetlagged, and your bag is nowhere to be found. Looks like you’ll be presenting to the head of European operations in the clothes you’ve spent 16 hours in.
Santa Barbara technology veteran Cleveland Motley wants to make sure that doesn’t happen again.
Motley is the founder and CEO of AvX Technology, a startup that has developed a high-tech luggage tag designed to help airlines get their bags to the right destination at the right time. And a lot of bags don’t—a Wall Street Journal estimate pegged the number at 31 million mishandled bags in 2008.
“What we’re selling is peace of mind and security that you’re doing something to make sure your bags don’t get lost,” Motley said. Before AvX, Motley was on the executive team that expanded Goleta-based Somera Communications to $240 million in revenues and a 1999 initial public offering.
The problem is that the technology airlines use to track baggage is old. When you check a bag, a barcode is printed that tells the airline where to route the bag, along with your flight plan. But Motley said industry data shows those tags can’t be read by scanners about 15 percent of the time.
If the tag is damaged or lost, the airline has no information to go on except whatever you’ve scribbled on your personal luggage tag.
Enter AvX’s “smart baggage” technology. It solves what Motley says is essentially a problem of information and connectivity.
Here’s how it works: A user signs up for the AvX service, which costs $25 for the first year and $20 a year after that. After booking a trip, the customer e-mails an itinerary to AvX, which stores that information in it databases.
The AvX tag, about the size of a credit card, is made of a tough material called Teslin and contains a barcode that airline scanners can read. It also contains a radio-frequency identification chip, included to future-proof the card when airlines switch to that technology.
If the bag is lost, airlines can scan the barcode to retrieve a phone number and account information about the bag’s owner. The phone number leads to a network of live agents that are available 24 hours a day to tell the airline where the luggage needs to go. Motley is hoping that such quick access to itinerary information will mean the difference between getting the bag onto the next flight from New York to London and taking a week to track down the owner.
“These were designed to work from Day One,” Motley said. “The live network is in place, the agents have been trained, and the code has been written.”
The tags also present some security advantages for people who are wary about putting their personal contact information on a baggage tag. The tags contain phone numbers and emails that any person who finds the bag can use to report the find, with automatic alerts delivered by AvX to the bag’s owner via text, e-mail or phone.
That also helps if you lose a bag in a taxi or hotel, which don’t face the same requirements as airlines for returning lost bags. “When the airline loses your bags, they’ll deliver it to you,” Motley said. “Let’s say you leave it in London. To ship a bag back to Santa Barbara, it’s at least $100 to $150.”
Lost bags are a pervasive problem in the airline industry. The International Air Transport Association has launched a program aimed at reducing mishandled luggage by 50 percent. The man heading it, Andrew Price, had his bags lost by airlines seven times during his first year on the job, according to the Wall Street Journal.
“You’re still in the situation where you’re at the mercy of the airlines,” said Brian Robertson of Santa Barbara-based Robertson International Travel Consultants. “An awful lot of luggage gets lost, but the retrieval rate is pretty good.”
Robertson said many of his clients choose luggage concierge services, which pick up bags at the passenger’s door before the trip and deliver them to the destination.
In addition to selling its tags to consumers, Motley says he plans to approach airlines and online travel booking sites about revenue sharing agreements for offering AvX tags to their customers. The airlines would gain revenue at no cost, and it might pave the way to automatically porting travelers’ itinerary data into the AvX system.
“If they have skin in the game, it will be in their interest to make it as seamless and painless as possible,” Motley said.
Right now, the RFID chips in AvX’s smart tags won’t get much use. That’s because airlines have been slow to adopt the technology. A disposable RFID tag costs 12 cents to 15 cents, compared with the 2 cents to 3 cents of a paper barcode tag, Motley said. But Motley is hoping AvX’s tags could help the technology catch on.
“They’re future-proof, but I think that future will come sooner rather than later”, Motley said. “Hopefully, we can accelerate it a little bit.”