"Over the 20-some year history we've looked at it, this is still the best time of airline performance we've ever seen," said Dean Headley, a business professor at Wichita State University in Kansas, who co-authored the report.
For the year, the country's 14 largest airlines improved their on-time percentage to 81.8 percent from 80 percent in 2011, the Detroit Free Press reported Monday.
Hawaiian Airlines had the best on-time rate of 93.4 percent. Express Jet and American Airlines had the worst on-time percentages, each at 76.9 percent, the report said.
Despite the improved on-time performance, complaints rose.
The Department of Transportation handled 11,445 airline complaints during 2012, about 20 percent more than 2011, when it fielded 9,414 complaints, the report said.
"The way airlines have taken 130-seat airplanes and expanded them to 150 seats to squeeze out more revenue, I think, is finally catching up with them. People are saying, 'Look, I don't fit here. Do something about this.' At some point airlines can't keep shrinking seats to put more people into the same tube," Headley said.
For the year, the industry's rate of denied boarding rose to 0.97 per every 10,000 passengers from 0.78 per 10,000 in 2011.
SkyWest had the highest rate of denied boardings with a rate of 2.32 per 10,000 passengers. JetBlue, which does not overbook flights to make sure planes are full, had a denied boarding rate of 0.01 per 10,000, the newspaper said.
The Los Angeles Times reported Sunday that federal budget cuts have not significantly affected U.S. airline on-time rates, at least not yet.
From March 18 to April 1, a period that includes the bustling spring-break travel spike, the on-time rate for U.S. airlines came to 79.5 percent, a slight dip from the same period in 2012 when the on-time rate was 81.2 percent, research firm FlightStats reported.
The Los Angeles Times reported Sunday Los Angeles International Airport saw its on-time rate for the spring break period improve this year compared to last.
LAX's on-time rate climbed from 76.7 percent to 81 percent, FlightStats said.
Federal officials have warned spending cuts associated with sequestration would cause long delays at airports.
"Such delays would affect air travel significantly, potentially causing thousands of passengers to miss flights with negative economic consequences at ... the local and national levels," Homeland Security Secretary Janet Napolitano wrote in letter to a congressional panel explaining how she felt the budget cuts would affect travelers.
John Pistole, head of the Transportation Security Administration, expressed similar concerns, noting delays would be especially acute during peak travel times, the newspaper said.
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