Governments need to urgently tackle a capacity crisis facing airports as demand for international travel grows, but they should be cautious about private sector involvement, airline industry group IATA warned on Monday.

With passenger levels projected to nearly double to 7.8 billion by 2036, infrastructures such as airports and air traffic control systems were not keeping pace, the International Air Transport Association said.

Major airports have sought to address the crisis by managing slots -- giving airlines specific operating rights at particular times.

But there was still a need for new airports, IATA chief Alexandre de Juniac said at the body's annual meeting in Sydney.

"We are in a capacity crisis. And we don't see the required airport infrastructure investment to solve it," he said, adding that cash-strapped governments were increasingly turning to private firms to increase airport capacity.

But he cautioned against privatised airports, warning that they have "not lived up to airline expectations" with many carriers having "far too many bitter experiences".

"Travellers also sense the problem. According to (global rating system) Skytrax, five of the top six traveller-preferred airports are public," he said.

"Privatised airports are definitely more expensive. But there is little difference in efficiency or investment levels compared to airports in public hands." IATA today projected global air passenger traffic to rise by 6.5 percent this year to 4.36 billion, after increases of 7.0 and 7.3 percent in 2016 and 2017 respectively.

The body, which represents 280 airlines, will consider a resolution on the privatisation of airport infrastructure on Tuesday that calls on governments to factor in long-term economic and social benefits when commissioning new terminals.

The resolution will also call for better regulation governing privatised airports and protecting consumer interests.