South Korea may intervene to end a strike by unionized pilots at Korean Air and bring in emergency mediation to avoid damaging the economy, the government said on Friday.

Pilots at South Korea's biggest airline have been on strike over pay since Thursday, forcing the airline to cancel about 60 percent of its scheduled flights.

Management and the union met on Friday but failed to agree.

The airline, which says the strike is costing about KRW25 billion won (USD$24.17 million) a day, expects to have to cancel over 70 percent of flights this weekend if the strike goes on.

"We cannot avoid pushing ahead with emergency measures unless the management and union solve this by themselves," Labor Minister Kim Dae-hwan told a news conference.

Kim has the authority to stop a strike and bring in emergency mediation, and used that power when unionized pilots at the country's second-largest carrier, Asiana Airlines, went on strike for almost a month in August.

Finance Minister Han Duck-soo said earlier the government should prepare all possible measures as intangible losses were increasing.

Asia's fourth-largest economy is heavily dependent on air cargo, sending most of its semiconductor and mobile phone exports by plane.

The Commerce Ministry estimates the strike may disrupt about 20 percent of the country's air cargo, costing exports worth about USD$1.5 billion a month.

The country's five major business lobby groups, including the main Federation of Korean Industries, also asked the government to step in and end the strike as soon as possible.

There are no plans yet for further talks between management and the union.

The union wants a 4.5 percent rise in basic salary, down from an initial demand for 6.5 percent. Pilots had been pushing for a 7.98 percent increase in total annual wages, including 6.5 percent in basic salaries. Management offered 2.96 percent growth, including a 2.5 percent increase in basic salary.

"We cannot adjust the offer because we cannot be against the principle of equity between pilots and non-pilot employees, who did not get any raise except some bonuses," said Lee Hyung-woo, a spokesman at Korean Air.

Korean Air's non-pilot union represents about 10,000 employees, while the pilot union has about 1,300 members.

"We regret that management has not made any concession," union spokesman Park Byung-ryul said by phone.