Thousands of lost Terminal 5 bags 'will be burnt if owners cannot be traced'

The luggage belongs to customers of British Airways, which has repeatedly denied the allegation.

Yet an executive in Milan, where the 5,000 bags are being sorted, admitted that incineration was an option.

Giovanni Tinelli, from Onboard Express, which has a £5 million a year contract to sort lost BA bags, said: "All our BA bags that are untraceable are sent back to BA and then they are destroyed in an incinerator."

He said much of the baggage contained dirty laundry and owners would be compensated by BA.

Piling up: An estimated 28,000 bags went missing on the opening day of Heathrow's Terminal 5

An estimated 28,000 bags went missing when the £4.3billion Terminal 5 building opened on March 27, although BA will not reveal the exact number.

A spokesman for the company said every effort was being made to trace owners. He admitted lost bags may be put up for auction after six months or more.