To the comment about it being normal as it requires a better processor, I have the iPad Air 2, which is the latest model except for the iPad pro, and I am experiencing lag as well. If it can't run on my iPad, it can't run on anything.
Don't know for sure, but I believe it may be because different items are rendered at different objects. For example, from a distance, I can see a building with a gap where the door would be. As I fly toward the building, the door appears, and at this point the game lags.
Hope this helps, and please fix soon!
0.14 - no lag!
This should be marked as closed, as well as the related bugs.