Qantas has plunged while rival Virgin Australia has surged in the annual awards ranking the world's best airlines.
For the second year in a row, Qatar Airways took out the Airline of the Year award for best airline in the world.
Qantas fell out of the World Airline Awards' top 10 for the first time, dropping to number 15 from number eight last year. The airline's ranking has sunk every year since 2008, when it peaked at number three. This year's drop comes in the wake of last year's industrial dispute that saw CEO Alan Joyce ground the airline's entire fleet in October, affecting about 68,000 passengers worldwide.
Virgin Australia, conversely, has surged up the rankings 20 places, up to 12th spot from 32nd last year.
Virgin Australia also took out the awards for best airline and best airline staff service in the Australia-Pacific region.
Skytrax CEO Edward Plaisted said the awards were "something of a victory over the more established legacy carriers that have previously taken the top prizes in these categories”.
Virgin Australia's Mark Hassell said that the new products the airline has introduced over the past 18 months were "making a real difference".
Virgin Australia is locked in a heated battle with Qantas for business class passengers, increasing capacity and bringing lie-flat seating on to domestic flights. The war has resulted in business class fares hitting a 20-year low.
A Qantas spokesman said the airline anticipated its ranking might slip "following the industrial campaign by several unions which disrupted thousands of passengers".
"Our employees have worked hard to rebuild loyalty from our customers and we have recently reached the highest level of customer satisfaction in Australia for over three years," he said.
In better news for the airline, Qantas received three top rankings in this year's awards for best first class lounge (at Sydney Airport), best premium economy class and best premium economy class catering.
Among local budget airlines, Jetstar was named best low-cost carrier for Australia-Pacific.
Still in our region, Air New Zealand had a worse showing than Qantas, dropping to number 17 in the worldwide rankings after reaching 7th last year.
The World Airline Awards are determined by passenger surveys conducted by research firm Skytrax, who surveyed more than 18 million passengers.
The awards were announced yesterday at the Farnborough Air Show in the UK.
Plaisted congratulated Qatar Airways on the airline's second consecutive win, pointing out that the carrier had rapidly climbed the rankings from its number eight spot six years ago.
"The award reflects opinions of passengers around the world, and is based on every customer type across all cabins - be they business or leisure, frequent or first-time flyers," Plaisted said.
Several other awards were announced, including best first-class (Etihad), best business-class (Cathay Pacific), best inflight entertainment (Emirates) and best low cost carrier (AirAsia).
World's best airlines 2012
Previous year's ranking in brackets. Click on the Flight Test links to read our reviews.
1. Qatar Airways (1) (Flight Test)
2. Asiana Airlines (3)
3. Singapore Airlines (2) (Flight Test)
4. Cathay Pacific Airways (4) (Flight Test)
5. ANA All Nippon Airways (11)
6. Etihad Airways (6) (Flight Test)
7. Turkish Airlines (9)
8. Emirates (10) (Flight Test)
9. Thai Airways International (5)
10. Malaysia Airlines (12) (Flight Test)
11. Garuda Indonesia (19)
12. Virgin Australia (32)
13. EVA Air (16)
14. Lufthansa (15)
15. Qantas Airways (8) (Flight Test)
16. Korean Air (24) (Flight Test)
17. Air New Zealand (7) (Flight Test)
18. Swiss Int'l Air Lines (13)
19. Air Canada (21) (Flight Test)
20. Hainan Airlines (23)
Best first class - Etihad Airways
Best business class - Cathay Pacific
Best premium economy - Qantas
Best economy class - Singapore Airlines
Best inflight entertainment - Emirates
Best low-cost airline - AirAsia
Best cabin staff - Malaysia Airlines
Best economy class meals - Singapore Airlines
Best first class lounge - Qantas (Sydney Airport)