Qantas's prolonged labor problem is affecting not only the air carrier's bottom line, but also the financial viability of Australia's tourism industry.

Industry expert John Lee forecasts up to a 10 per cent decline in early bookings for Christmas as Australians fear their flights being grounded by the strike. Many Aussies now prefer to stay home for the yearend holidays, he said.

""If people are waiting in airports lounges rather than enjoying the rock, reef and beaches that's not going to help our reputation.... They're not going to act as ambassadors for 'brand Australia' when they go home and that's really concerning to us," News.com.au quoted Mr Lee, who is the chief executive of lobby group Tourism and Transport Forum.

He disclosed that besides the Qantas labor row, another reason behind the slower growth of domestic tourism is the strong Australian dollar. When combined with Australians' fear of their flights being canceled, the percentage of Aussies that plan to stay home for the coming Yuletide holiday dipped by 3 per cent.

International tourist arrival is also expected to register a weak 0.4 per cent growth in 2011, down from the previous forecast of a 3.1 per cent expansion, due to concerns about economic uncertainty among foreign tourists and natural disasters that hit Australia.

Because of those factors, plus the fact that Australia is a relatively mature travel market similar to France, Germany, Spain and Britain, World Travel and Tourism Council President David Scowsill forecast a 2.5 per cent annual growth rate for the Australian tourism industry in the next 10 years.

If it is any assurance to Australians, Qantas's Transport Workers Union (TWU) had called of their planned Wednesday strike. Instead of the baggage handlers, caterers and ground crew walking off their jobs, the TWU will meet with Qantas representatives.

The reason behind the change of TWU's stand was an assurance from Qantas that it would not outsource the jobs being performed by TWU members.

"I think we still have some steps to go through with Qantas and most importantly with discussion about details about any arrangement to be entered into by Qantas but this announcement by Olivia With today that the company is not planning on outsourcing any of its work is a positive change to the Australian workforce," TWO National Secretary Tony Sheldon told ABC Online.

A similar conciliatory approach was adapted by the Australian Licenced Aircraft Engineers Association last week.

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