The largest U.S. airlines last year posted their best on-time performance rate since 2003, while the rate of mishandled baggage was the lowest since 2004.

The 19 carriers that report performance to the U.S. Department of Transportation reported an on-time arrival rate of 79.5%, up from the 2008 rate of 76%. That's the best effort since the 82% reported in 2003.  

The carriers recorded a mishandled baggage rate of 3.91 per 1,000 passengers last year, the best performance since 2004, when the rate was 4.91 per 1,000 customers.

In December, the 19 carriers posted an on-time arrival rate of 72%, far below November's record setting pace of 88.6%  

For the month, the airlines with the lowest rate of on-time performance were American Eagle Airlines (AMR), Comair, and AirTran Airways (AAI). 

But rising fuel costs could mean fliers will pay more for airlines improved performance.  In December, fuel prices rose 3.4% over 2008, but rose only a cent from November.  According to the Bureau of Transportation Statistics airlines spent $2.11 per gallon while total fuel consumption  was 1.33 billion gallons, off 5% from last year, but up 8.4% from November.