It is believed her husband Alister, a former local councillor, and children had gifted the skydive as a 50th birthday present. She was strapped to an instructor, who was also killed, along with another instructor who was jumping alone and may have tried to help Ms Pike and his colleague as they fell.
Skydive Australia released a statement following the incident confirming that three people had died after sustaining injuries in the accident.
Police believe the solo skydiver may have collided with the tandem skydivers in mid-air, with their parachutes failing to open properly.
"I had a bad feeling because I could see a silver object falling between two skydivers which is unusual", she said.
The site where Mrs Pike and two other skydivers plunged to their deaths.
An eyewitness was quoted as saying: "You could see one chute was tangled and it wasn't opening".
"I was just watching him in free fall until he went behind the trees, and that was the last I saw", he said.
The body of a skydiver was found in a residential yard in Mission Beach, about 110 kilometres south-east of Cairns, about 3pm on Friday.
'It wasn't good to watch.
Peter Dawson, Kerri Pike and Toby Turner (left to right) were found dead after a collision at Mission Beach.
"I don't understand how three people could have died, unless someone was trying to catch them", he said.
Skydive Mission Beach's website states that the company offers tandem jumps from altitudes of up to 15,000ft or 4572m.
It is understood the Australian Parachute Federation, which is a partner organisation of the Civil Aviation Safety Authority, will lead the investigation into the incident.