The delivery of checked baggage successfully and on time improved by 20.3% in 2011 with 99.1% of checked baggage delivered promptly, according to a SITA report.
The SITA Baggage Report reveals that the baggage mishandled rate has halved since 2007, reporting a 52.4% decline from 18.88 bags mishandled per thousand passengers in 2007 to 8.99 bags per thousand in 2011.
SITA CEO, Francesco Violante, said: "Significantly improving the handling of baggage to over 99% has saved airlines $650 million while also providing better service to passengers."
"During 2011, even though we saw a rise in the number of passengers travelling to 2.87 billion passengers, the industry achieved a reduction in mishandled bags to 25.8 million," said Violante.
"This is 6.5 million fewer bags mishandled than 2010's figure of 32.3 million."
The results were attributed to efforts made by airlines, airports and ground handlers through the IATA Baggage Improvement Programme, increased focus on standards by the Airports Council International (ACI), and the use of enhanced baggage management solutions.
SITA said that the 'transfer bags' was main contributor for mishandling which account for 53% of all delayed luggage and costs the industry about $1.36bn per year.
During 2011, the overall mishandling rate declined 45% to 640,000 when compared to earlier recorded 1.15 million, while about 2.47% of the mishandled bags or 640,000 bags were failed to be returned to their owners when compared to 3.56% or 1.15 million bags in 2010.
The improvement in baggage handling was also attributed to the increased use of mobile devices and a demand for more real-time information.
The report claimed that the airlines and airports have to improve the quality, accuracy and sharing of data in relation to baggage movements to meet passenger expectations.