This paper proves feasibility of a fully distributed automation design of Baggage Handling Systems automation. The proposed design methodology leverages IEC 61499 Function Blocks as a supporting architecture. Each physical element of the BHS, such as a conveyor is represented by a Function Block that encapsulates functionality into a single re-usable module. The proposed solution demonstrates such benefits as flexibility, fault resilience and design re-use. A graph based representation of the system layout was used for rendering of the visualisation. The solution was prototyped using ISaGRAF the first commercial implementation of IEC 61499 and tested on a network of 50 networked control nodes, each representing an embedded controller of a single conveyor or of a group of conveyors. The Ethernet communications framework was tested to confirm the appropriate levels of network utilisation and potential sources of delay were identified. This design approach can be regarded as cyber-physical since it naturally combines simulation models into the design life-cycle, providing ready to use simulation within the design framework.