Palmair European has a member of staff who greets every single passenger and draws up the seating plans from her kitchen table the night before departures.
The airline flies its 34-year-old Boeing 737 no more than twice-a-day yet beat off multi-national rivals Virgin Atlantic and British Airways in the poll.
Some 70,000 passengers were asked to vote the best overall experience and value for money of 70 worldwide airlines by consumer magazine Which?
They were asked to rate the cleanliness of the aeroplanes, the amount of leg-room, catering quality and the cabin crew performance.
Palmair, which has just 70,000 passengers a year, came in joint third position with Air New Zealand and behind Jet Airways and survey winner Singapore Airlines.
It also came in first place for the short haul airline category.
David Skillicorn, managing director of Palmair, said he was delighted.
He said: “We are just little Palmair with a little boeing 737 yet we beat of the likes of Virgin Atlantic and British Airways.
“Singapore Airlines has 100 planes including the A380 which is the largest plane in service, on-board massages and a choice of dvds.
“All we can offer is the choice of tea or coffee – that is why I feel so flattered. Coming joint third in this poll is such an amazing achievement.”
Palmair was founded by its late chairman Peter Bath in 1957 when the company leased an aircraft to take passengers to Majorca.
It became Palmair European in 1991 after the company bought its own Boeing 737 and it now flies to 14 European destinations including Spain, Tenerife, Portugal, Corfu and Croatia.
Until 2006, Mr Bath made sure he was in the departure lounge for each flight to greet the passengers.
He then stood on the Tarmac at Bournemouth Airport in Dorset where the airline is based and waved off every single flight.
When Mr Bath passed away, long-standing airport representative Teresia Rossello took over the role.
She also ensures each customer can have their choice of seat by drawing out a plan in her kitchen every night.
Stewardesses place fresh flowers on the plane, including the toilets, every day and the company has removed a row of seats to give customers more room.
Palmair employs 25 cabin crew and 25 back office staff and the plane flies twice a day in the summer months and once a day in the winter.
The airline does not operate any night flights as Mr Bath believed they were “anti-social”.
Mr Skillicorn said: “When Mr Bath founded Palmair, his belief was that if people were good enough to pay money to fly with him then the least he could do was greet each passenger.
“When he died, we continued that tradition and now Teresia does the job and waves off every plane from the Tarmac.
“Teresia lives 10 minutes away from the airport and is the face of check-in and allocates the seats.
“She maps out the seating plan the night before on her kitchen table using special notes she has made for each passenger.
“Those who want more leg room get it and families who want to sit together can. Other airlines charge for a service like this but not us.
“We have taken out a row of seating to give the 130 passengers more leg room and put fresh flowers on-board for every flight.
“Mr Bath never allowed his flights to leave before 9am as he believed night flights were anti-social.
“I have made a slight change and our earliest is now 8.20am but I would never dream of going any earlier than that.
“We have a team of caterers that prepare the meals at the airport and we are always looking to change what we serve according to what the customer wants.”
Peter Vicary Smith, chief executive for Which?, said the awards “singled out those companies that deserve special praise and recognition for their outstanding achievements.”