With Qantas cutting hundreds of flight over the next month and the Transport Workers Union warning the conflict could drag on as long as 18 months, industry body Tourism and Transport Forum says the disruption is "starting to bite".
"Broadly, we're starting to see some knock-on impacts in terms of small business owners at airports, taxi drivers, and tourism more widely, " Justin Wastnage, national manager of aviation at TTF, says.
"The longer the dispute drags on, the more damage it does," Wastnage says.
But he points to comments from Federal Tourism Minister Martin Ferguson that if the dispute is affecting second or third industries, the Government can force the two sides into talks under the Fair Work Act.
Ferguson has said that "the sooner the parties get in a room and sort it out the better."
"You can have a dispute with employers but there is a responsibility on trade union leaders to never set out to damage Australian industry, not only Qantas but, in doing so, many struggling small and medium tourism businesses who are doing it exceptionally tough with the strong Australian dollar and whom, I must say, employ workers on far lower wages and conditions than licensed aircraft engineers employed by Qantas."
Wastnage also says customers are being helped by a responsive Virgin, which is upgrading its aircrafts from smaller to larger, and in the process pushing its occupancy levels to just under 100%.
Wastnage points out that Qantas' current dispute with baggage handlers, engineers and pilots follows further complaints by customs and quarantine staff.
But he says air travel is "very resilient" – even after natural disasters and price hikes.
TTF's comments come as consumer group Choice and travel company Flight Centre warn that prices could rise for flights over the New Year if flight cancellations continue.
Flight Centre spokesman Haydn Long told the Herald Sun that people could find themselves paying more for Boxing Day flights – or driving.
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