updated 3:45 p.m. ET Sept. 4, 2007

WASHINGTON - The percentage of flight delays at the nation's largest airlines rose in July compared with a year ago, the government said Tuesday — a reflection of rising travel demand, some bad weather and increased use of smaller planes.

The airline industry's on-time performance in the first seven months of 2007 was its worst since comparable data began being collected in 1995. July's on-time performance was the 11th worst on record.

The 20 carriers reported an on-time arrival rate of 69.8 percent in July, down from 73.7 percent a year ago, according to the Department of Transportation's Bureau of Transportation Statistics. Through July, more than 25 percent of flights have arrived late.

"When we continue to see these record delays, it disappoints us ... and certainly lets our customers down, but we're not surprised by the numbers," said David Castelveter, a spokesman for the Air Transport Association, whose members include Continental Airlines Inc., Delta, American, UAL Corp.'s United, Southwest Airlines Co. and JetBlue Airways Corp.

Despite the delays, the association forecast 15.7 million passengers would travel globally on U.S. airlines during the extended Labor Day period through Wednesday, a 2.6 percent increase from the year-ago period, according to the trade group.

Regional carriers also have seen their work load increase, having served 155.7 million passengers last year, up 38 percent from 2003, according to the Washington-based Regional Airline Association. Those carriers, which include Mesa Air Group Inc. and Delta Air Lines Inc.'s Comair subsidiary, operated at nearly 74 percent of capacity on average last year, up from 66 percent four years ago.

The extra burden on smaller planes, as well as an increase in general aviation aircraft used by corporate travelers, adds to congestion in the skies and on runways.

Castelveter said a planned upgrade of the system used to manage commercial and general aviation traffic will help reduce air and runway congestion.

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The FAA last week awarded a ITT Corp. a contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system. However, the entire project is expected to take nearly 20 years to complete and cost more than $15 billion.

Meantime, weather conditions caused more than 43 percent of delays in July, an increase of nearly 11 percent from the year-ago period, according to the government data.

Hawaiian Holdings Inc.'s Hawaiian Airlines had the highest on-time arrival rate at 94.7 percent, followed by Aloha Airlines at 91.5 percent and Pinnacle Airlines at 78.9 percent.

Almost half of Atlantic Southeast Airlines were delayed and it had the lowest on-time arrival rate at 54.2 percent, followed by Comair at 62.4 percent and AMR Corp.'s American Airlines at 63.4 percent. Atlantic Southeast, which is owned by SkyWest Inc., is a Delta Connection carrier.

The rates of mishandled baggage and customer complaints also rose in July, according to the government data.

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