Skip to main content

Inconsistent and Opaque Compensation Policies Among Airlines for Baggage Mishaps Understand Claim Limits and Procedures to Protect Rights

  • 2023.09.14

As global travel gradually resumes after the pandemic, many people are once again enjoying the pleasures of travelling. However, baggage delays, damage, or loss during one’s journey can be very dispiriting and time-consuming to deal with. The Consumer Council surveyed 22 airlines operating flights to and from Hong Kong on their baggage compensation arrangements, reporting procedures, and claims details for international flights, and found that while all airlines provided compensation for passengers with baggage incidents, there are significant differences in terms of cash allowances, definitions of lost baggage, and whether claims for fragile or valuable items are accepted. Some airlines lacked transparency in their compensation details and often handled claims on a “depending on the circumstances” basis, which can easily lead to disputes. Regrettably, 8 airlines did not even respond to the Council's enquiries. The Council calls on airlines to provide more specific and accurate information to avoid disputes. While consumers are generally protected by international conventions in the event of baggage incidents, it is important to be aware that the compensation limits under these conventions may not be sufficient to fully cover the loss of baggage containing valuable items, and it may be advisable to purchase additional insurance. Additionally, it is a good practice to take photos as record before checking in baggage, and place fragile and valuable items in carry-on baggage. Consumers should also take heed of the different claim requirements and time limits of various airlines and retain all correspondence records for future reference.

International Conventions Delineate Airline Responsibilities

Crucial to Note Compensation Limits

International air travel passengers are typically protected by the Warsaw Convention or the Montreal Convention. These conventions outline the liability of airlines during the transportation process, including cases where loss of or damage to carry-on baggage due to the airline’s or its employees’ negligence, or when checked baggage is delayed, lost, or damaged while under the airline’s control unless the baggage possesses inherent defects, quality issues, flaws, or by the passenger’s negligence, or (if the Warsaw Convention applies) the airline has taken all necessary measures (or it is impossible to take such measures) to avoid such damage.

The conventions also specify the liability limits of airlines in case of baggage mishaps, but the methods of calculation differ between the Warsaw Convention and the Montreal Convention. For international flights covered by the Warsaw Convention, the maximum compensation for checked baggage is 17 Special Drawing Rights (SDRs) per kg (approximately HK $177), and for carry-on baggage 332 SDRs (approximately HK $3,460) per passenger. Where the Montreal Convention applies, regardless of whether it is checked or carry-on baggage, the combined maximum compensation is 1,288 SDRs (approximately HK $13,430) per passenger. If the checked baggage is of higher value, the compensation may not suffice to fully cover the losses.

Consumers should also note that while these conventions cover domestic segments of international journeys, if an entire trip is confined to a single country or region, it would be regarded as a domestic flight, and baggage incidents will be subject to local regulations with compensation liability and amounts determined accordingly.

Almost 4-fold Difference in Cash Allowance for Delayed Baggage

Avoid Expensive Substitutes in Reimbursement Process

When travelling abroad, if checked baggage does not arrive at the destination at the same time, one’s immediate task is to replenish daily necessities, clothing, or other essentials. All airlines stated that passengers can be reimbursed for related expenses in such situations. However, 3 airlines specified that checked baggage must be delayed for over 24 hours to be eligible for reimbursement. In terms of reimbursement amounts, specific airlines had special practices, e.g. some set a specific maximum reimbursement limit, and that items which can continue to be used (such as clothing) will only be reimbursed at half value. For some routes, which may be subject to specific countries’ regulations (e.g. the United States and Canada), the practice of issuing reimbursement at half value may not apply. Apart from reimbursements, half of the airlines (11) provided passengers with a one-off cash allowance for delayed baggage, ranging from approximately HK $237 to about HK $1,177, a difference of almost 4-fold, 3 of which issued different cash allowances based on the passenger’s cabin class. Additionally, 1 airline provided a cash allowance of approximately HK $275 for each 24-hour delay in baggage delivery.

The Council reminds consumers that when purchasing essential items in the event of baggage delay, it is crucial to retain all purchase receipts for reimbursement purposes, and consumers should also avoid choosing more expensive products to prevent airlines from refusing reimbursement of unreasonably priced items, or only offering partial reimbursement. If the cash allowance provided by the airline is insufficient to cover the expenses of purchasing essential items, consumers can still claim compensation for the difference. However, 12 airlines pointed out that if baggage delays occur on the return journey to the passenger’s place of residence, such as when a Hong Kong resident returns to Hong Kong after travelling abroad and finds that their baggage has not arrived together, the airline may assume that the passenger has sufficient clothing and hygiene products at home and may refuse compensation for purchase of such products.

Consumers should also be mindful that upon confirmation that their checked baggage cannot be found at the baggage claim area, they should report to the airline’s baggage service counter as soon as possible to obtain a “Property Irregularity Report” (PIR). Passengers can generally file post-incident reports within 21 days through various methods such as by phone, email, or online form.

International Conventions Protect Damage to Baggage Wheels and Handles

Valuables Should be Declared Beforehand

Apart from delayed baggage, passengers often encounter varying degrees of checked baggage damage. If more severe damage (e.g. cracked shell) occurs during transportation due to mishandling by the airline, passengers have the right to hold the airline responsible. 15 airlines indicated they would attempt to repair the baggage, while 19 airlines stated that if repair is not possible, monetary compensation would be provided. Additionally, 15 airlines indicated that they could offer replacement baggage. However, consumers should be aware that compensation amounts are influenced by various factors, such as provision of purchase receipts, age of the baggage, depreciation rate applied by the airline, the maximum compensation limits under the Conventions, etc. Furthermore, the style, brand, and value of the replacement baggage may not necessarily match the original.

Regarding damage to protruding parts such as wheels or handles, different airlines had varying policies. 3 airlines indicated that they would not assume responsibility for damage to these parts, 8 airlines stated they would take responsibility, and the rest had their own interpretations or did not specify their practices. According to the U.S. Department of Transportation’s guidance, if the wheels or handles of baggage are damaged, airlines should not regard it as normal wear and tear and refuse compensation. Under the Montreal Convention and the Warsaw Convention, any clause aimed at exempting the carrier from liability or limiting the liability specified by the conventions is considered void. Therefore, consumers can invoke relevant stipulations to demand reasonable compensation from the airline. Otherwise, the airline might be in violation of the provisions of the Conventions.

On the other hand, if consumers discover baggage damage only after leaving the airport, a report to the airline should be filed within 7 days. However, 3 airlines in the study specified that they would not accept post-incident claims, while most other airlines might require passengers to provide evidence that the damage did not occur after baggage retrieval.

Some passengers choose to check valuable shopping haul purchased during their travels to lighten the load of their carry-on baggage. While both Conventions hold airlines responsible for damage to fragile or valuable items inside checked baggage during transportation, if passengers do not properly package such items, airlines may cite passenger negligence as a reason to wholly or partly exempt themselves from liability for compensation. 9 airlines stated they would not be responsible for damage to fragile or valuable items in checked baggage, while only 2 indicated they would compensate. 3 airlines stated that if passengers could provide evidence such as photos demonstrating that the fragile items were properly packaged before checking in, they might assume responsibility for the damage. As for valuable items, most airlines did not specify clearly whether they would accept related claims. Consumers who need to check fragile or valuable items should ensure they are properly packaged beforehand and take photographs as record. To reduce the risk of damage, consider placing such items in carry-on baggage and purchasing additional insurance for valuable items.

Declaration of Lost Baggage Could Take Up to 45 Days

Annual Depreciation Up to 15%

The worst-case scenario of baggage incident is the loss of baggage. If checked baggage remains unlocated after a specific period of delay, the airline will declare the baggage lost and initiate the compensation process. The survey found significant differences among various airlines in the time they took to “declare baggage lost”, ranging from the shortest of 5 days after the baggage could not be located, to as long as 30 to 45 days after the flight’s arrival. The Montreal Convention clearly states that passengers have the right to claim compensation if their checked baggage is not delivered within 21 days of the flight’s arrival or if the airline acknowledges that the baggage is lost. Passengers should submit a list specifying the quantity and value of items inside the baggage to the airline for compensation as soon as possible, along with receipts as evidence or it may result in reduced compensation amounts. Consumers should also be aware that airlines would typically consider the duration of use of lost items and will take depreciation into account when calculating compensation amounts. 2 airlines claimed not to apply any depreciation rates, while the annual depreciation rates adopted by other airlines ranged from a minimum of not less than 8% to a maximum of 15%, while an individual airline would even apply a first-year depreciation rate of up to 30%.

Furthermore, 7 of the surveyed airlines stated that upon subsequent location of baggage after baggage loss compensation was awarded, they would not request a refund from passengers. 2 airlines indicated they would ask passengers to return the compensation, while another 2 expressed that whether passengers should refund compensation received would be reviewed by relevant departments or decided depending on the circumstances.

Codeshare and Connecting Flights by Different Airlines All Liable

Different airlines may jointly operate the same flight, known as codeshare flights. According to the Montreal Convention, if passengers encounter baggage issues on codeshare flights, they can choose to claim compensation from one or all relevant airlines based on their personal considerations. As for passengers on connecting flights involving different airlines, they can file a claim for baggage issues with the first or last carrier of their journey. Conventionally, passengers would usually report baggage issues to the airline responsible for their baggage on the last leg of the journey.

Airlines have the responsibility to compensate passengers for baggage incidents in accordance with international conventions. However, the survey showed that some airlines lacked transparency in this regard or employed vague terms such as “depending on the circumstances” or “to be decided by relevant department”. The Council opines that these practices need improvement, and passengers can refer to these tips to protect their rights:

  • Ensure the baggage is in good condition before departure, with no cracks or damage to the outer shell, wheels, or handles. It is advisable to document the condition of your baggage with photos or videos before checking in;
  • If checked baggage and its contents have a higher value, make a special declaration to the airline, and provide relevant proof and pay the required surcharge for additional protection;
  • If baggage is damaged upon arrival, take photos of the damaged parts from different angles and keep the damaged baggage as evidence for claim;
  • For purchase of essential items due to baggage delay, first enquire with the airline and insurance company (if applicable) about reimbursement details and compensation limits, such as whether the return flight to the place of residence is eligible for reimbursement. Retain all receipts for reimbursement purposes;
  • When filing a claim with an airline, ensure that it is done within the airline's specified time frame or within the convention’s time limits;
  • If travel insurance is purchased and compensation is claimed from both the airline and the insurance company, first obtain written proof of the baggage incident from the airline and request follow-up and compensation. When subsequently filing a claim with the insurance company, they may deduct the compensation received from other organisations, including the airline.


Download the article (Chinese only):


Consumer Council reserves all its right (including copyright) in respect of CHOICE magazine and Online CHOICE.