Airport screening changes would leave passengers facing a raft of "ineffective", "useless" and unnecessary safeguards, warned Michael O'Leary, the boss of budget airline Ryanair.
But while he cautioned against overreacting, some industry experts called for an urgent overhaul of passenger security and the introduction of "package to package" checks.
A review of airline security is now likely after investigators concluded that the terrorists had designed a package to blow up passenger jets in a Lockerbie-style terrorist outrage.
The new row over passenger jet safety came as David Cameron was chairing a crisis meeting of Cobra, the government's emergency planning committee, where officials were discussing the plot and what implications it could have on air transport and security.
Ministers and officials were discussing tougher checks on freight and potentially commercial aircraft that would make travel "even more uncomfortable and tedious" for travellers.
Both bombs found last week were transported in the hold of passenger flights, suggesting that the terrorists were targeting tourists and other travellers, rather than simply trying to bring down cargo planes, as had previously been thought.
Mr O'Leary, Ryanair's chief executive, said authorities might now make travel "even more uncomfortable and tedious" for travellers.
He said it was "madness" that "some Yemeni terrorist" could disrupt Western aviation as he warned against overreacting.
"Every time we have a terrorist scare, the first thing that goes out the window is common sense," he told reporters in London.
"I am not quite sure why the Prime Minister is meeting with Cobra. He is meeting with people who have already introduced utterly ineffectual aviation security measures.
"We in the aviation industry are all for effective security measures such as taking knives off passengers, but we are all opposed to ludicrous and ineffective measures."
He added: "We would screen passengers for such items as bombs, knives, guns and machetes.
"Everyone should calm down. People do need to keep some sort of balance and some sort of realism. You have meetings of Cobra because some people want to be seen to be doing something.
"It's quite ridiculous to say that we've foiled international terrorism by banning large bottles of liquid from carry-on bags on aircraft.
"What happens, particularly in the coverage of the Yemeni issues of recent days, is that we have another huge lurch by the securicrats into making travel even more uncomfortable and an even more tedious ordeal for the travelling public.
"Sadly they always win the day and they lurch around with ludicrous new measures."
The device found at East Midlands airport on Friday had left Yemen on a passenger aircraft, The Daily Telegraph has learnt, before it was switched to a UPS cargo plane. The second device, found in Dubai, was carried on two Qatar Airways passenger flights before it was intercepted.
Sources close to the investigation in Yemen said because there were no scheduled cargo flights out of the country it was likely the terrorists knew the bombs would be loaded on to passenger planes for at least part of their journey.
Theresa May, the Home Secretary, also admitted it was possible that the US-bound bomb found at East Midlands could have detonated over Britain if it had not been found, because of the unpredictability of freight routes.
But a former head of security at airport operator BAA, Norman Shanks, said checks on freight were not as stringent than those on passengers as he called for "package by package" screening.
Mr Shanks, now an aviation consultant, called for a fundamental review of security.
"This situation is quite similar to the problems we faced after Lockerbie with checked baggage," he said.
"We had to come up with a better system. I think we're going to have to introduce the same type of technology for air cargo.
"It's going to have to be done package by package."
In further developments:
* A woman was being hunted in Yemen after posting the bombs, using an identity stolen from a student.
* Investigators in Yemen said they were examining 26 other suspect packages.
* British police faced criticism from the US over their failure to find the East Midlands device during their initial search.
* Downing Street was forced to defend David Cameron’s decision to say nothing about the bomb plot for more than 24 hours.
* The airline pilots’ union said it had been warning for years of cargo being a weak link in air travel that could be exploited by terrorists.
The two bombs, concealed inside computer printers, were virtually impossible to detect by X-ray screening because they contained an odourless explosive and used timers that would have looked like part of the printers’ electronics.
They were designed to explode in mid-air and would have been as capable of bringing down an aircraft as the device that blew up PanAm Flight 103 over Lockerbie in 1988, killing 270 people.
More than half of all freight to the US is carried on passenger flights and Lord Carlisle of Berriew, the former government adviser on terrorism, said there was every chance a parcel bomb could end up on a passenger plane.
“If you put a parcel into UPS, you have no way of knowing what flight it is going to go on,” he said. “It could end up on a passenger flight.”
One of the bombs went to Dubai via Doha in Qatar on a passenger aircraft. The device that was found at East Midlands airport left the Yemeni capital of Sana’a on a passenger aircraft, which is also thought to have stopped at Doha, before it travelled to Cologne in Germany and Britain in cargo planes.
Mrs May said: “What became clear overnight on Friday and into Saturday was that it was indeed a viable device and could have exploded.
“It could have exploded on the aircraft, and it could have exploded when the aircraft was in mid air. Had that happened it could have brought the aircraft down.”
Mrs May said it was “difficult” to say whether the explosion would have happened over Britain or America. “With these freight flights sometimes the routing can change at the last moment so it is difficult for those who are planning the detonation to know exactly where — if it is detonated to a time, for example — the aircraft will be,” she added
After investigators in Yemen confirmed that they were examining 26 other packages, John Brennan, President Barack Obama’s counter- terrorism adviser, said “it would be very imprudent … to presume that there are no other [bombs]".
Mr Brennan described the bombs as “sophisticated”, adding: “They were self-contained. They were able to be detonated at a time of the terrorists’ choosing.”
He said the plot “bears the hallmark” of al-Qaeda in the Arabian Peninsula (AQAP), the terrorist organisation’s Yemeni-based operation, whose leaders include Anwar al-Awlaki, an American-born preacher.
The most likely bomb maker is said to be Ibrahim Hassan al-Asiri, who made the device used in the foiled Christmas airline attack over Detroit.
The bombs, which were addressed to two synagogues in Chicago, contained the contact details of a 22-year-old computing student, Hannan al-Samawi, who was arrested on Saturday night.
However, investigators released her at the weekend and said they were now seeking another woman who it was thought had posted the devices using Miss al-Samawi’s personal details.
Intelligence that foiled the plot may have come from Jabir Jubran al-Fayfi, a former leading member of AQAP, who surrendered to the Saudi authorities last month.
In light of the plot, the US National Transportation Safety Board is re-examining the wreckage of a UPS cargo jet that crashed in Dubai in September, although sources in Dubai said there was no evidence of an explosion.
American officials expressed concern at the fact that the bomb at East Midlands was discovered only during a second police search.
Mr Cameron said the Government would “take whatever steps are necessary” to keep British people safe, but Downing Street was forced on to the defensive after the Prime Minister took until 6pm on Saturday – 26 hours after he was first briefed on the incident – to make a public statement.
It was left to Mr Obama, and later Mrs May, to break the news that viable devices had been found. Sources said Mr Cameron “wanted ministers to take the lead”.
Balpa, the pilots’ union, said it had warned for years of the threat from cargo, suggesting that the focus on checking passengers and their luggage “left the door open” for attacks by other means.
Last week, before the Yemeni incident, British Airways chairman Martin Broughton had called for an easing of airport security measures, an appeal which struck a chord with other aviation bosses.
Transport Secretary Philip Hammond has said he hoped to ease the passenger experience.