The company said 17 flights had been cancelled leaving more than 2,500 passengers stranded.
Communications Minister Haris Thrassou condemned the stoppage, warning it would drive the beleaguered airline to the verge of bankruptcy.
The Pasypi pilots' union apologised to the public for the inconvenience and said they were fighting for their livelihoods, with pay cuts of 25 per cent threatened under the restructuring plan.