''While the value of this initiative has been welcomed by many, including a growing list of airlines expressing interest in the program, there has also been much confusion," the association said in a statement.
"In North America particularly, there have been significant concerns raised in the media and by key stakeholders."
The initiative provided passengers with a voluntary option to use a ''Cabin OK'' labelled bag (with optimally sized dimensions of 55 x 35 x 20 cm) that would be immediately recognisable as complying with the vast majority of airline maximum size requirements for cabin baggage and be given a priority (determined by airlines individually) to remain in the cabin on full flights when cabin storage capacity was exceeded.
Airlines in the United States in particular have problems loading all cabin baggage on full flights as many passengers opt not to pay to have bags carried in the hold.
'"Our focus is on providing travellers with an option that would lead to a simplified and better experience," IATA senior vice president of airport, passenger, cargo and security Tom Windmuller said.
"While many welcomed the Cabin OK initiative, significant concerns were expressed in North America. This is clearly an issue that is close to the heart of travellers. We need to get it right.
"Today we are pausing the roll out and launching a comprehensive reassessment of the Cabin OK program with plans to further engage program participants, the rest of our members, and other key stakeholders," he said.
IATA said Cabin OK did not seek to define a maximum size for carry-on bags, which is something each airline does individually.