Strike completely grounds Pakistan's national airline

Passengers wait to get on a flight, which was cancelled due to strike by employees of Pakistan International Airlines (PIA), at Karachi's Jinnah International Airport February 9, 2011.

KARACHI (Reuters) - Striking workers grounded all flights by Pakistan's national airline on Friday, the fourth day of an industrial action that has so far cost the carrier more than a billion rupees, a company spokesman said.

"There is a complete shutdown. No planes are flying," said Mashhood Tajwar, a spokesman for the Pakistan International Airlines PIA.L (PIAa.KA).

Many PIA pilots, flight crew and ground staff went on a strike on Tuesday to protest against a proposed codeshare agreement with Turkish Airlines (THYAO.IS).

Strikers are also demanding the sacking of PIA's managing director, Aijaz Haroon, a pilot considered a close friend of President Asif Ali Zardari, and immediate reinstation of staff recently suspended or dismissed.

Tajwar said at least 10,000 to 15,000 passengers were affected and more than 250 flights cancelled since Tuesday.

Under the proposed deal with Turkish Airlines, which is yet to be approved by the government and regulators, PIA would relinquish some of its lucrative European and U.S routes.

This includes flights to Germany, Spain, Italy, France, the Netherlands, Chicago and New York.

According to a joint action committee of PIA employees, handing over these profitable routes will deprive the national airline of billions of rupees in revenue.

"STRIKE TO CONTINUE"

Sohail Baluch, the chief of the Pakistan Airline Pilots' Association (PALPA), told Reuters the strike would continue until their demands are met.

"We have long been warning of this action, but it looks like the government wants to protect one person and put the 20,000 odd PIA employees and hundreds of thousands of its passengers in trouble," he said, referring to PIA chief Haroon.

"I assure you that the strike will continue. We wouldn't have come this far if we had to compromise on our justified demands."

Like many state businesses in Pakistan, PIA has been hit hard by mounting debts and mismanagement. Analysts say any move on the part of the government to further subsidise PIA or other ailing national institutions will not bode well with international donors.

PIA reported losses of 11.7 billion rupeesin the nine months to September 30, 2010, when its cumulative losses stood at 83.7 billion rupees.

In November 2010, PIA asked the government to write off losses and debt of about $1.7 billion to save it from bankruptcy, a tough ask for the government which relies heavily on foreign aid, and an International Monetary Fund loan programme that, among its many conditions, calls on the government to reduce subsidies and spending.

The government has yet to agree to PIA's request, officials say.

(Editing by Chris Allbritton and Miral Fahmy)