Dressed in a tight, red uniform, complete with makeup and fake eyelashes, Branson served as a flight attendant on Fernandes' AirAsia aircraft flying fromAustralia to Malaysia.
"We are having a good laugh. I think I've honoured my side of the bet. And I'm delighted that Tony is reciprocated by going to space, and we've raised money for charity, so we've had a fun day," Branson said during the five and half hour flight.
The event came after the two airline bosses, Fernandes of AirAsia and Branson ofVirgin Group, entered Formula One in 2010 with their own teams. Fernandes bet his Lotus Racing team would do better in their debut season than the Virgin Racing team with the loser dressing up as an female flight attendant and serving on the rival airline.
Fernandes won as his Team Lotus finished 10th in the constructors' championship to Virgin Racing's 12th.
Branson, whose airlines include Virgin Atlantic, is no longer involved in Formula One with the Virgin team now competing as Marussia Racing, while Fernandes's team has since been renamed Caterham F1.
Fernandes has pledged to Branson that he will be one of the first few passengers on Virgin Galactic's first commercial space flight.
To prepare for his debut as a stewardess, Branson had his legs shaved the night before in Perth as part of the bet.
"Thanks to Tony and thanks to my delightful crew for being such great sports today, for teaching us how to serve food, how to walk properly, how to look beautiful and how to drop a tray on Tony's lap," said Branson.
When asked about Branson's performance, Fernandes was not satisfied, especially after being drenched by a cup of orange juice during the flight.
"Rubbish. Basically out of ten maybe one for a bit of humour," said the AirAsia chief, who later told Branson he was fired.
"It was a great honour to spend a day as an air stewardess for one of their flights," responded Branson. "I realise that I am now fired, and I am going to go back into civilian clothes and go back to my day job. I always wanted to be an air hostess but it looks like I have to get back to normality."
Money raised from a portion of the tickets sold for the flight will go to the Starlight Foundation, an organisation that helps brighten the lives of hospitalised and seriously ill children and their families in Australia.
AirAsia estimate the special flight will raise around 200 thousand Australian dollars (about 200,000 U.S dollars).