Cathay Pacific will continue flying the skies this Christmas season, following an agreement it reached with the Flight Attendants Union to defer the implementation of an enhanced medical scheme. Cathay Pacific announced on Thursday the deal that averted a possible walk off by stewardesses that could have repercussions not only on air travelers itineraries, but also Hong Kong's tourism revenues.

Between 40 percent to 50 percent of Hong Kong Christmas crowd as flown in and out by Cathay Pacific.

To end the stalemate between the air carrier and flight attendants, Hong Kong's Labor Department mediated from December 13 to 20. After a week of talks, the FAU promised to refrain from any kind of work disruption or stoppage over their disagreement with the flight attendants having to partly shoulder outpatient bills beginning January 1.

The unpopular scheme was moved to May 1, but the flight attendants will start co-paying their outpatient medical costs only after the first 10 visits for the 8-month period May to December 2008.

Cathay Pacific assured travelers the threat of a flight disruption is gone. In anticipation of the FAU strike, a number of Hong Kong air passengers booked their holiday flights with other carriers. According to Li Wai-keung, general manager of Sunflower Travel Services, only 30 percent of the agency's 600 tours were booked on Cathay Pacific and Dragonair flights. Dragonair is a subsidiary of Cathay.