PIA said none of its scheduled flights took off from anywhere in the country.
Staff stepped up their industrial action after two employees were shot dead during clashes with security forces in Karachi on Tuesday.
The strikers have been threatened with the sack if they hinder efforts to reform the loss-making airline.
Prime Minister Nawaz Sharif has said they may even be imprisoned.
On Wednesday dozens of PIA’s national and international flights were cancelled amid demonstrations by striking staff.
“Everything is shut now and flight operations have come to a complete halt,” airline spokesman Danial Gilani told the AFP news agency.
The violence in at Karachi’s Jinnah International Airport prompted the airline’s chairman Nasir Jafar to tender his resignation, but Mr Gilani said the PM had yet to accept the offer.
It is still not clear who fired the shots in Karachi, with both police and paramilitary forces denying that they did.
On Wednesday, additional police and security personnel were deployed outside major airports.
BBC correspondents say private airlines have been brought in to help clear the flight backlog – in some cases doubling their fares.
Staff are angry at proposals to complete a partial sale of the airliner by July.
PIA was once a source of pride for Pakistan but in recent years its reputation has been hit by losses, mismanagement and cancelled flights.
‘Callous disregard’ – media view
The privatisation issue has come under intense press scrutiny, with most Pakistani newspapers accusing the government of handling the affair clumsily.
As far as left-liberal Dawn is concerned, invoking an act of parliament to stop the airline unions striking was “an act of sheer panic”.
“Beyond the follies of the moment, the entire episode has turned a delicate matter into an open contest of wills of the sort that is usually won by the party with more grit, which in this case would be the unions,” it says.
The News, which is centrist, agrees, saying Tuesday’s events showed a “callous disregard for the norms of a healthy society” and adding: “It took only two days for an already bad situation to be worsened through a needless escalation.”
Urdu-language Nawa-i-Waqt wants an investigation but maintains that if the policy of not giving into pressure from the PIA employees is continued, “their blackmailing could be ended once and for all and the status of the national airline would be restored”.