Hawai'i's two major airlines snared the top spots for on-time performance in July as the industry as a whole struggled through another month of worsening delays and growing customer dissatisfaction.

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 released yesterday. 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.

Meanwhile, Hawaiian Airlines and Aloha Airlines were significantly ahead of the rest of the pack, with on-time arrival rates of 94.7 percent and 91.5 percent, respectively. Pinnacle Airlines, based in Memphis, Tenn., was a distant third at 78.9 percent.

July also was the 42nd month out of the past 45 that Hawaiian Airlines, a unit of Hawaiian Holdings Inc., has been the nation's most punctual airline.

Hawaiian, the state's largest carrier, also was tops for fewest mishandled-baggage problems, followed by Aloha, which had the next best record for baggage handling for July.

The Air Transportation Association forecast 15.7 million passengers would travel globally on U.S. airlines during the extended Labor Day period through today, a 2.6 percent increase from the year-ago period, according to the trade group.

Regional carriers also have seen their workload increase, serving 155.7 million passengers last year, up 38 percent from 2003, according to the Washington-based Regional Airline Association. Those carriers, which include go! parent 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.

The FAA last week awarded 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.

Almost half of Atlantic Southeast Airlines flights 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.