WASHINGTON — A quarter of domestic flights failed to arrive on time in 2007 — the industry’s second poorest performance on record — and analysts say it is likely to get worse.

More than 26% of commercial flights in America arrived late or were canceled last year as rising passenger demand and an industry preference for smaller planes intensified congestion in the skies and on runways. The air-travel logjam, reported yesterday by the Department of Transportation, comes as a growing number of air traffic controllers near retirement age — a trend the controllers’ union says will magnify the problem.

The only time passengers had more difficulty getting to their destinations on time was in 2000, when more than 27% of flights were tardy or canceled. Back then, there were 31% fewer flights than in 2007, when carriers operated nearly 7.5 million one-way trips. Excluding cancellations, however, 2007 was the worst on record for flight delays, with 24.2% arriving late, compared with 23.9% in 2000, according to government statistics that date back to 1995. The worst month of the year for the nation’s 20 largest airlines was December, when more than a third of all flights were late or canceled, mostly because of the weather.

There is no sign of improvement on the horizon, analysts said, because airlines continue to replace larger aircraft with smaller ones. The practice is intended to maximize profit margins by flying with fewer empty seats, but it also means more flights and more congestion and delays.

The use of smaller planes also increases airlines’ exposure to rising fuel prices, since it costs them more money per seat to operate, an airline consultant in Port Washington, N.Y., Robert Mann, said.

President Bush has demanded action to avoid another summer of record delays, but there is little consensus among airlines, airport operators, Congress, and the administration on what should be done.

The Federal Aviation Administration has been locked in a contract dispute with the union representing air traffic controllers since 2006. While the agency insists staffing has no impact on flight delays, the union says congestion problems will worsen unless the government hires more air traffic controllers and pays them better.

In an effort to address the airline delay problem, Transportation Secretary Mary Peters earlier this month said congested airports can charge landing fees based on the time flights land and traffic volume to encourage carriers to spread operations more evenly throughout the day.

But the Port Authority of New York and New Jersey, which runs John F. Kennedy International Airport, LaGuardia, and Newark Liberty, said the new policy was a minor fix for a major problem. In 2007, those three airports had the lowest on-time arrival rates, and aviation officials say delays there cascade throughout the system and cause three-quarters of all flight delays.