The pilot was not available for comment but his lawyer, John Haigh QC, told the Herald it was the end of what had been a "very sorry saga which has detrimentally affected, in a significant way, the pilot and his family".
"I think that Air New Zealand, as in most of its employment-related disputes, are relentless."
The Court of Appeal judgment said the pilot, his first officer and the flight attendant drank a "significant amount" in the pilot's hotel room on an unscheduled stopover in May 2008.
According to the pilot, he and the flight attendant fell asleep and when he awoke about 4am she was attempting to arouse him, which led to them having sex.
The flight attendant said she had no memory of the sex, and only realised it had occurred when she returned to her own hotel room. She did not think she would have willingly consented.
Air Nelson said the Court of Appeal finding highlighted the high threshold facing employers when trying to review judgments "believed to be erroneous".