The United States-based magazine said it honoured the airline for its "superb commitment to safety and operational excellence".
It noted the airline's navigational cockpit technology and "superb and groundbreaking" customer service which included high-tech, passenger-friendly IT systems and caring staff.
On the financial and managerial side, the magazine said Air New Zealand had performed remarkably well during one of the most turbulent periods in aviation history, while environmentally it played a leadership role in addressing environmental challenges facing the industry, including conducting the world's first sustainable biofuel flight.
Prime Minister and Minister of Tourism John Key said the award was well deserved.
"This is a great honour but, then again, no great surprise to those of us who continually experience the service that our national airline delivers," he said.
Mr Key said the airline excelled in many aspects of the air transport industry.
"Like so many New Zealanders I am immensely proud of Air New Zealand. Its ingenuity and innovation deliver new products that are mimicked by competitors around the world and its commitment to a more environmentally responsible future is leading the industry.
"However, it is the people who make a real difference, as evidenced by the total selflessness and caring attitude adopted by the company and its staff during the Samoan tsunami."
