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At Delta, tracking bags with radio tags

The airline plans to spend up to $25 million on an RFID system to put an end to lost luggage.

Delta Air Lines says it will use radio frequency identification technology to end the problem of lost luggage for its customers and save itself up to $100 million annually.

The company announced that it is to spend between $15 million and $25 million to launch an RFID system across its U.S. network. When the system is installed, it will be able to track bags from airport check-in counters, where the RFID tags will be attached, until they are dropped off at the baggage carousel at the customer's destination.

Delta ran a trial of the system earlier this year on flights from its base in Atlanta to Jacksonville, Fla., and the company says it can track bags 100 percent of the time. The airline has suggested that it may later give customers the opportunity to track their own bags.

Tag readers will be located in several places: at check-in counters, along conveyer belts leading to the areas where baggage handlers work, and at the entrance to airplane cargo holds.

The airline currently misplaces four bags out of every 1,000 carried and has to spend $100 million a year recovering and delivering them. The airline, like other U.S. carriers, is struggling financially.

Many other U.S. airlines and airports have run trials on the use of RFID to track and control luggage, but Delta is the first to commit to using the technology. The Las Vegas airport, McCarran International, is to start using the tags this fall.

Wal-Mart has also been a pioneer in RFID. The retail giant plans to use the technology to help track inventory and in January will start requiring its top suppliers to use RFID tags.

Ron Coates of reported from London.