United axes troubled baggage system at Denver airport

Von Todd R.

After more than a decade of trying to make Denver International Airport"s troubled US$230 million computerized baggage-handling system work as designed, United Air Lines Inc. is giving up on the failed project.

"It"s never worked up to its potential," said United spokesman Jeff Green. "We"ve spent enormous amounts of money over the last decade" to try to get it working, but the only parts of the system that operate properly are for luggage heading out of Denver on United and for some baggage transfers between flights, he said. The system has never been able to process luggage from flights arriving at the airport.

That"s a far cry from the promise of the high-tech, computerized baggage handling system envisioned for the airport, which opened in 1995. The system was designed to use PCs and thousands of remote-controlled carts that operate on a 21-mile-long track that is mostly underground. The carts move along the track, carrying luggage from check-in counters to sorting areas and then straight to the flights waiting at airport gates. Each piece of baggage has a special bar-coded tag attached when it"s checked in to help track the luggage along its journey through the airport.

The system was designed and built by BAE Automated Systems Inc. in Carrollton, Texas, which in June 2003 was acquired by G&T Conveyor Co. in Tavares, Fla. A spokesman for G&T declined to comment on the matter, saying that his company acquired only some assets from BAE and that the vendor no longer exists.

Bruce Webster, principal of Webster & Associates LLC, a Washington-based consulting company that works with companies on troubled IT projects, said the decision by United came years too late. "There are a few lessons that large companies just don"t seem to learn," he said. "The first lesson is that the best way to build a large, complex system is to evolve it from a small system that works. No one bothered to get a small system up and running in the first place -- they went for the big bang."

But "once the system gets to a certain point," he said, "there is an attitude that the project is too big to fail, that "we have to make it work now." There is an unwillingness in upper management to believe that things are as bad as they are."

Mark Keil, a professor of computer information systems at Georgia State University in Atlanta and a researcher on failed IT projects, said the plug should have been pulled in 1994, when the system failed to work as designed.

"Whenever you talk about building the biggest system in the world, the most complex, you should take pause," Keil said. "That is often a warning sign with these projects."

The problems with United"s elaborate system turned up quickly. "It was supposed to be fully automated, and it wasn"t," said United"s Green. "Only after several years could we get minimal automation on transferred bags."

The system was so problematic that it even delayed the opening of Denver International Airport by about 16 months. Built to replace the former Stapleton International Airport, it was set to open in October 1993 but did not do so until February 1995 -- four months after United became the project manager for the system in a bid to resolve the problems.

By the time the airport opened, it had returned to manual baggage handling for all inbound flights, with workers using traditional motorized baggage tugs to move bags on special trailers from sorting areas to aircraft for loading.

Green said United expects to stop using the computerized system for outbound bags sometime after Labor Day. Once the system is halted, all bags will be handled manually by workers using luggage tugs.

The company has been considering a move away from the computerized system for months, he said. One reason, he said, is to save $1 million a month in maintenance costs. But more important, the airline also expects to drastically cut costs for misdirected and damaged bags caused by the system. "Using this system simply doesn"t allow us to provide the level of quality customer service that we want to provide," Green said.

Chuck Cannon, a spokesman for Denver International Airport, said the original plan was for the baggage system to handle bags for all three concourses and all the airlines at the airport. "It just did not work," Cannon said. "It was very complicated. They couldn"t make it work the way it was intended."

Despite its decision to shut down the system, United will still have to pay the airport $60 million a year as part of its lease, Cannon said. Overall, United pays about $200 million a year for use of airport gates and facilities.

The baggage system originally cost about $230 million to design and install, according to Cannon. The conventional baggage handling system later brought in for inbound flights added another $70 million to the tab by 1995. And the delay in opening the airport added another $340 million in interest that couldn"t be paid because the facility wasn"t yet operational.

Lawsuits between the vendor and other parties were long ago settled, he said, but as the system aged, it needed more maintenance, ultimately contributing to the decision to halt its use.

"[United] finally said, "We"re going to go back to the old way,"" Cannon said. "[The computerized system] was an experiment that never did work the way it was supposed to work. If it had, everybody would have been heroes and everyone would have wanted them."