The Denver International Airport is shutting down their automated baggage handling system (Denver Airport ...). It was pricey:
Tours that preceded the system's debut led invariably to an airport basement where 26 miles of track, loaded with thousands of small gray carts, sped bags up and down inclines as conveyor belts minutely timed by the computer deposited each bag in its cart at just the right moment.
"They were so proud of it," said Raymond Neidl, an airline-aerospace analyst with Calyon Securities in New York. "It's the one thing they wanted to show you."
But then the price tag ballooned along with glitches. Construction costs of $186 million were compounded at a rate of $1 million a day for months in 1994 when the airport's opening was delayed by baggage-handling failures. Tens of millions more have been spent in the years since for repairs and modifications.
Instead of continuing to pour money down the black hole (i.e., the best way of honoring the fallen luggage is to make sure we deliver future luggage to the right place at the right time with the same luggage system that mangled past luggage), United, the only airline to ever use the system, has recognized that the additional benefits of the system are less than the additional costs. That is a recognition by a rational decision maker that sunk costs don't matter. Rational decision makers can admit their past mistakes.
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