On domestic routes, passenger demand is expected to hit 1.77 billion by 2011, compared to the 1.37 billion who flew in 2006, due in part to expanded flight traffic inside large countries such as India and China.
"The numbers show that the world wants to fly. And it also needs to fly," IATA Director General Giovanni Bisignani told a conference in Damascus, where the forecast was released.
Bisignani said the ever-increasing demand for air travel -- targeted by many environmentalists as a key source of carbon emissions causing global warming -- provided the industry with "an opportunity for sound investment in a green future."
But he warned that a failure by governments to plan for infrastructure improvements to meet the growing demand and to solve air traffic control problems "will have an environmental cost with inefficient use of air space and delays."
IATA, which represents some 240 companies operating 94 percent of international scheduled air traffic, opposes "eco-taxes" on airlines and says the industry is tackling its carbon emissions with investments in new, efficient technology.
Its new forecast showed that economic growth in India, China and Vietnam would fuel both domestic and international travel to and from those countries, increasing Asian passenger numbers by an average annual rate of 5.9 percent.
China's average annual increase for the five years would be 8.8 percent, India's 8.6 percent, and Vietnam's 7.7 percent.
In Europe, international passenger demand would grow annually at an average of 5 percent between 2006 and 2011, driven by a surge in former communist countries.
Among these, Latvia is likely to see average annual growth over the five years of 12.1 percent, while in Russia it will hit 9.3 percent, in Poland 9.2 percent, and in Ukraine 8.8 percent.
In North America, the maturity of the air travel market -- easily the world's largest -- and an expected slowing of U.S. economic growth is likely to hold the average passenger increase over the period down to 4.2 percent, IATA said.
Freight carried by air, both by specialised carriers and passenger aircraft, is expected to grow at an annual average rate of 4.8 percent, IATA said.