The rates of lost bags, late arrivals, passengers bumped from overbooked flights and consumer complaints all declined, private researchers say in their annual study of airline quality, based on government statistics.

     While the industry had its best overall performance in the ratings in four years, the picture was not entirely rosy.

     High fuel costs and a poor economy led many airlines to reduce schedules, raise ticket prices, jettison frills and put in place fees for everything from luggage to pillows.

     Nevertheless, consumer complaints for the 17 airlines included in the study dipped from 1.42 per 100,000 passengers in 2007 to 1.15 in 2008. Southwest Airlines had the best rate, only 0.25 complaints per 100,000 passengers; US Airways had the worst rate, 2.25.

     Half of all complaints involved baggage or flight problems such as cancellations, delays or other schedule deviations.

     The average on-time performance last year was 3 percentage points better than the year before, yet nearly one-quarter of all flights were late. The study being released Monday said 12 airlines improved from the previous year, but only three airlines had better than an 80 percent on-time rate: Hawaiian Airlines, 90 percent; Southwest, 80.5 percent; and US Airways, 80.1 percent.

     American Airlines, the nation's largest air carrier as measured by passengers flown the most miles, had the worst record, arriving on time only 69.8 percent of the time.

     The overall rate of passengers denied boardings - usually bumpings due to overbooking - dipped slightly, from 1.14 per 10,000 passengers to 1.1 in 2008. Jet Blue had the lowest rate for the second year in a row, 0.01 per 10,000 passengers; Atlantic Southeast Airlines had the highest rate, 3.89.

     All the airlines did a better job handling passengers' baggage. The mishandled baggage rate fell from 7.01 bags per 1,000 passengers in 2007 to 5.19 bags in 2008.

     AirTran Airways did the best job, with 2.87 mishandled bags per 1,000 passengers; American Eagle Airlines did the worst, at 9.89.

     The study, compiled annually since 1991, is based on Transportation Department statistics for airlines that carry at least 1 percent of the passengers who flew domestically last year. The research is sponsored by the Aviation Institute at the University of Nebraska at Omaha and by Wichita State University in Kansas.

     An overall ranking of the 17 airlines based on their combined performance in four categories was to be released Monday.

     The improved performance was not surprising because 2007 was the worst year for airlines in the study, said co-author Dean Headley, an associate professor of marketing at Wichita State.

     The aviation system suffered close to a meltdown in 2007 as domestic carriers reported 770 million passengers in the busiest year for air travel since before the attacks of Sept. 11, 2001. Aviation experts said the air transport system had reached capacity.

     There were 741 million passengers in 2008, and airlines are reporting weak travel demand through the first quarter of this year,

     "We're now in a time when the system is constricting and performing reasonably well," Headley said. He urged Congress to take advantage of this "breathing room" to move forward on a system that would replace decades-old radar technology with satellite-based technology.

     That new system is forecast to increase air transportation system capacity by enabling planes to fly closer together and more directly to their destinations, saving time and fuel.

     "It's crazy to think we can keep going the way we were going with the volume of planes we have in the air," Headley said.