Most flights by Pakistan's ailing national airline were grounded on Wednesday, a company spokesman said, as striking employees disrupted operations to protest against a government privatisation plan.

The strike is the latest in a months-long series of protests against the plan to sell off part of Pakistan International Airlines (PIA), among companies the government has pledged to privatise under an International Monetary Fund (IMF) deal.

The grounding of flights follows the deaths of two PIA employees and injuries to several others during clashes on Tuesday with security personnel armed with water cannons, tear gas and batons near the international airport in Karachi.

The two men died of gunshot wounds, hospital officials said, though police and Pakistan's paramilitary force have denied opening fire on the crowd of several hundred as it marched toward the Jinnah International Airport in the southern city.

"Most of the PIA flights are not being allowed to take off from any of the airports, domestic or international," said airline spokesman Danyal Gilani, although some returning international flights were being allowed to land.

A spokesman for the protesters did not immediately answer telephone calls from Reuters to seek comment.

PIA's management expressed "deep grief and sorrow" over the deaths of its employees, Gilani said, and asked the government to launch an inquiry into Tuesday's incident.

Since Jan. 26, the strike has cost the airline about 1 billion Pakistani rupees ($9.6 million) in losses, he added.

In a television interview on Tuesday night, company chairman Nasser Jaffer said he planned to resign.

"From this day on, my conscience does not allow me to stay as chairman of this organisation," the emotional Jaffer said on Dunya Television.

"Two people lost their lives. I don't think anything worse than this could have happened."

Once a source of pride for Pakistan, the loss-making carrier has been hit by frequent flight cancellations, and many of its aircraft have been cannibalised to keep others flying.

Despite government attempts to allay fears the privatisation could lead to mass layoffs, sporadic protests have continued.

Prime Minister Nawaz Sharif this week extended legislation to ban the airline's employees from striking for six months, the government said in a statement.

The law specifies prison terms of up to a year, and an unspecified fine, for those convicted of infringements.

Sharif vowed not to back down from the reform plan.

"Action will be taken against those who have gone on strike," he told reporters on Tuesday. "I believe that any concession on this will be a disservice to Pakistan." – Reuters