Over 400 Kurdish travel and tourism companies are directly affected by the flight ban and 7,000 are jobs at risk in the sector, Erbil-based Rudaw TV said.
The transport minister of the Kurdish Regional Government (KRG), Mawloud Bawah Murad, expressed bafflement at the move by Baghdad.
An Iraqi government order that global airlines halt all flights in and out of the cities of Erbil and Sulaimaniyah in Kurdish territory is set to kick in on Friday.
The Kurds, whose borders with Turkey, Iran and Syria remain open, have condemned the flight suspension as "collective punishment".
Iran has closed its airspace to Iraqi Kurdistan region upon the request of Iraq's central government. "An airport isn't an item that can be handed over to someone".
The flight ban is the clearest evidence of increased tensions between Iraq's central government and the Kurdish area. That's something, at least, since Iraq, Iran, and Turkey all seem to be preparing war against Kurdistan to bring it back under Baghdad's thumb.
We urge Iraqi Kurdish authorities to respect the constitutionally-mandated role of the central government and we call upon the central government to reject threats or even allusion to possible use of force.
Pursuing a long-cherished dream of statehood, the Kurds went ahead with the referendum in defiance of widespread objections, including from the United Nations and United States.
Iraqi Prime Minister Haidar al-Abadi's office said on September 28 that Turkey also agreed to deal only with the Baghdad government in the future on crude oil exports.
On Wednesday, Abadi demanded the results of the vote be "annulled" and talks take place "in the framework of the constitution". There were also reports of internal highway closures.
Turkey has maintained a military presence around Bashiqa outside the city of Mosul much to the annoyance of Baghdad.
Mawlood Bawa Murad told reporters his ministry is ready to negotiate with Baghdad "if they want to implement the law and show that Iraq has one air space".
Iran's semi-official Tasnim news agency is reporting that the country's armed forces plan to hold a joint military drill with the Iraqi army near Kurdish territory.
But a World Bank official said Kurdistan would be able to resist an economic blockade.
Kurdish authorities rejected Baghdad's demands that they should annul the referendum as a condition for dialogue and hand over control of their worldwide airports.