THY's website was also hit by a cyber attack and was not working, transport minister Binali Yildirim said, adding 104 flights had been cancelled and he would take "necessary steps" if the issue was not resolved soon.

The head of aviation union Hava-Is said the employee action was a response to the draft bill, but was not an official strike - THY staff can strike only after a statutory process.

"Many of them have become sick and do not feel ready to fly. In terms of flight safety, they are unable to perform their duties," Hava-Is general secretary Mustafa Yagci told Reuters.

THY (THYAO.IS) spokesman Ali Genc said on Twitter: "The Hava-Is Union has made an illegal call for a strike and some workers have responded to this call. Because of this we are experiencing problems to flight operations".

Alper Ozdemir from Oyak Securities said there was still an outstanding dispute over pay for 2011 and 2012 between THY and the union. "If the government cannot pass the law banning the strike rights of the union, it is possible that the union goes on a full strike within a month," Ozdemir wrote in a note.

THY, 49 percent state-owned, has undergone rapid expansion over the past few years, expanding its fleet and adding dozens of new routes, bringing the number of destinations close to 200.

It owns a 49 percent stake in Bosnian flag carrier BH Airlines and is in talks to buy a stake in Polish flag carrier LOT .

(Writing by Jonathon Burch and Daren Butler; Editing by Dan Lalor)

• A Permanent Economic Emergency