"Who?" a confused Hasselhoff replies.
"New Zealand."
Hasselhoff says he thought it was "fantastic" before recounting an episode at Mount Maunganui Beach, where he was greeted by a sign reading 'The Mount comes to the Hoff'.
Rico goes on to quiz Hasselhoff, talkshow-host style, about his career, but confuses his long-running role on Baywatch with the show Magnum P.I..
The potty-mouthed puppet then takes on the role of "handsome psychiatrichist" and asks his co-star: "So, tell me, how does The Hoff feel about The Hoff?"
Lying propped up on pillows, Hasselhoff says the term bothers him because "I'm not really The Hoff. I'm David Hasselhoff".
At the end of the clip, Rico presents Hasselhoff with a present from New Zealand - a pair of black speedos with the word 'kiwi' printed on them.
YouTube Australia & New Zealand Head of Media Solutions, Karen Stocks, says Air New Zealand is continuing to push marketing boundaries with the online-only videos.
"Air New Zealand is one of our most innovative advertisers on YouTube and the Rico campaign has been a worldwide success on our video platform," she said.
Air New Zealand's General Manager Marketing, Mike Tod, says Rico's global popularity coupled with increased interest in Air New Zealand's award-winning in-flight products and service was an ideal platform to begin exploring online retail campaigns integrated within video content on YouTube.
"Social commerce is in its relative infancy. As Air New Zealand continues to the push the boundaries of social media engagement, we're creating the opportunity to capitalise on the tens of millions of people who have engaged with the airline," he said.
The last video in the series featured rapper Snoop Dogg and went viral on YouTube.
More are set to follow, with Air New Zealand's YouTube channel showing teasers of Rico's upcoming interviews with Mean Girls star Lindsay Lohan and E! News host Giuliana Rancic.