CATHAY Pacific and the striking Flight Attendants' Union were early this morning still locked in talks aimed at breaking the deadlock in a dispute which is costing the airline an estimated $20 million a day and threatening thousands of new year holidays. The talks, called by the Labour Department to try to end the bitter four-day action by the FAU, began at 12.30 pm yesterday at an undisclosed location. It is understood the marathon negotiations have been far from cordial, with recriminations flying across the negotiating table. Credit Lyonnais Securities yesterday estimated the dispute was costing Cathay Pacific $20 million a day in profits. Cathay general manager Mr Rod Eddington said the company ''has not even begun to count the cost'' of the dispute. ''Our main concern are our passengers,'' he said. ''It is unfortunate we have reached this situation, but I hope we can resolve it before any permanent damage is done. ''When there is a strike there are no winners, only losers. The company loses, the passengers lose and the staff lose.'' The FAU was claiming 90 per cent support for the strike. About 400 flight attendants had joined the strike from overseas. Cathay managed to operate 21 flights out of Hongkong yesterday, including six combined flights. Many of these were carrying the minimum requirement of 10 cabin crew for 747s and eight for TriStars. The airline also managed to secure seats for passengers on eight other carriers and arranged seven charter flights. Four flights were cancelled, involving 1,160 passengers who were put up in hotels at the company's expense. The cancelled flights were long hauls to Los Angeles and Zurich, and two regional charters. A flight to Australia was delayed early this morning after being reportedly stuck on the tarmac. Of the Cathay flights due to arrive in Hongkong yesterday, 21 arrived, 18 were cancelled and four delayed. In Manila, flight attendants on leave yesterday were coming to Ninoy Aquino Airport volunteering to work on outgoing flights. In Bangkok, only one or two Cathay flights have been getting through to the Thai capital each day and staff have been ordered to stop taking bookings. In Taiwan, Cathay Pacific has today cancelled six flights to Hongkong, leaving from Taipei and Kaohsiung. According to Cathay's spokeswoman in Taipei, Ms Nancy Chen Nam-sai, China Airlines will provide support flights. At Kai Tak departure lounge yesterday, passengers waiting for overdue flights complained Cathay staff were not keeping them informed. One businessman said: ''They are failing to keep their passengers well-informed. They keep telling people the flight is delayed when it has actually been cancelled.'' Early this morning there were long queues in the departure hall as irate passengers waited for their flights. Cathay's strike hotline took more than 4,000 calls yesterday. Mr Eddington said the airline had never closed the door to talks about reinstating the three first-class pursers dismissed last month for refusing to operate in down-graded positions. The FAU called its wildcat strike last Wednesday, claiming the company had refused to reinstate the sacked pursers or consider improvements to the airline's staffing levels. Leading the management side in the talks was Cathay's general staff manager Mr Ian Wilson, while heading the FAU side was its chairman Mr David Ngan. Mr Eddington said Cathay had to rely on a great deal of ''goodwill'' from other regional airlines for charters to help move the passenger backlogs. ''All airlines have aircraft and crews on standby to protect their own operations and we have been able to call on these to help move our passengers,'' he said. There was some confusion when FAU representative, Ms Vihem Hung, claimed no agreement had been reached - contradicting company claims talks were continuing. ''As far as it stands there is no agreement with management. Management has refused our terms and the strike is still on,'' she said. ''Management is claiming what we are doing is illegal and they have refused to reinstate the three girls who were dismissed unfairly.'' She said the Labour Department tried to get the two parties together at 11 am ''but unfortunately before the meeting could even start there were differences of opinion from the two sides''. She said 2,500 members had joined the strike and ''we are very pleased with the turnout. I know that 90 per cent of our members are agreeing to the strike and participating. ''It has increased over the three days and we have new members coming in the whole time. Morale is very high. Overseas staff are also participating.'' Ms Hung said she could not comment on alleged threats made to union members. ''We do have a strike emergency fund. I don't think any member of crew is out there starving on the streets. We will last as long as we have to,'' she said. ''But we also want to end this dispute. I don't think I need to say anything to our passengers out there, they already know, and we have their support. We have received telephone calls to that effect.'' Mr Rowland Cobbold, marketing director of Cathay Pacific, denied claims the union side walked out at one point because of an ''unreasonable request'' by the management. Mr Cobbold also would not comment on claims FAU president Mr Ngan staged a walkout. Cathay Pacific management was said to have demanded to talk with only the FAU president and not other union representatives, triggering the move. But a Cathay director Mr Linus Cheung described it as ''a healthy sign'' that the meeting did take place and said ''both sides'' wanted to reach an agreement. The meeting was attended by two officials from the management, and an unknown number of persons acting as mediators. It is not known how many union representatives were present. Mr Cheung refused to reveal the number of attendants on strike, but said it was ''quite clear a large number of cabin crew were supportive of the company''. He also expressed concerns at reports which suggested trouble at the picket line and intimidation at the homes of some crew members, claiming a number of people would like to go to work but were ''frankly afraid to do so''. On counter claims that Cathay management had been intimidating flight attendants in areas where they lived, Mr Cobbold said the company was only sending transport to pick staff up to work. ''I would not deny there will be people driving around to see what sort of activities may be going on . . . but there is absolutely no question whatsoever of management bullying people to go back to work,'' he said. Cathay said 55 flight attendants who had not turned up for work had been given warning letters.