Tuesday's strike added to the travel chaos brought on by powerful Typhoon Nesat, which slammed into the country earlier in the day causing many other domestic flights, ferry services and railway operations to be suspended.
The ground staff staged the wildcat strike in protest over plans by Asia's oldest airline to outsource their jobs on October 1, and they vowed to continue grounding flights until management promised to keep them in work.
"This is an illegal lock-out. We are being terminated without cause," Gerry Rivera, president of the striking PAL Employees' Association (PALEA), told AFP.
"We apologise profusely to the riding public, and sympathise with those who were affected just as the typhoon struck, but this is a bigger typhoon hitting our lives.
"We have been trying hard to follow the rule of law, but our backs are pushed against the wall. We will lose our jobs, our livelihoods."
Philippine Airlines was clearly caught by surprise by the walk-out, which led to at least 50 international flights and 35 domestic services being cancelled, with a spokeswoman saying no back-up plan was immediately available.
"Our workers walked out of their jobs and these include the airport services staff in charge of checking in and boarding passengers, as well as those in the catering services," PAL spokeswoman Cielo Villaluna told AFP.
"We are now taking steps to find a solution to ensure that normal operations are restored."
PAL sent termination notices to its ground staff last month, saying it needed to trim its workforce to save up to $15 million in annual operating costs.
The outsourcing programme was a key component of PAL's "survival blueprint" launched last year after the airline incurred losses of $312 million in the 2008-2009 fiscal year.
PAL has said the laid-off staff, who provide the in-flight catering, airport services and call centre reservations, have an option to join the outsourcing operation.
But this has infuriated the union, which said the conditions of the new jobs are far inferior.
PAL, founded in 1941, is also facing the prospect of industrial action from its flight crew over higher wages and retirement benefits.
The embattled airline has suffered on a range of other fronts, suffering a major blow last year when 25 pilots and first officers abruptly quit for higher paying jobs abroad.
It has also had to watch rival Cebu Pacific overtake it in recent years as the country's number one airline in in terms of passenger numbers.