A pilots' strike at Korean Air continued for a third day, forcing the largest airline in South Korea to cancel more than two-thirds of its flights scheduled for Saturday, company officials said.
The national flag carrier said 69 percent of its 388 flights had to be scrapped, including 46 of 147 international passenger flights and 22 of 29 cargo flights, a Korean Air spokesman said.
Labour-management talks resumed on Saturday for a second day as the union came under mounting pressure from the government to return to work soon or face forced arbitration.
"Today, the union lowered again the average rate of wage hikes to 3.5 percent, down from 4.5 percent they demanded on Friday," a Korean Air spokesman told AFP.
"No agreement was reached yet and both sides agreed to continue talks. It may last for many hours," he said.
Labor Minister Kim Dae-Hwan has warned that the government would intervene to end the cripping strike as soon if it turns out that the disputed parties are unable to reach a compromise.
Under emergency arbitration, striking workers must immediately return to work and they are prohibited from resuming industrial action for 30 days.
A state labour commission then has up to 15 days to act as a mediator. If no compromise is reached, the commission can force the two sides into a compulsory agreement. The Korea Employers' Federation said the cost of the strike in lost exports could reach 200 million dollars.
Korean Air said the strike affected 44,000 passengers and the shipment of 3,500 tons of cargo, causing 25 million dollars in losses every day. Korean Air has 1,980 pilots, with some 1,300 belonging to a union.