State-run media reported Vietnam's Civil Aviation Administration fined Vietjet Air 20 million dong ($960) for staging the three-minute show on Aug. 3 without receiving official approval.
A YouTube video shows young women in open vests and red bikini tops dancing down the aisle and handing out teddy bears as gleeful male passengers smile and snap photographs on the flight.
In a letter to Vietnamese authorities Tuesday, the company said the event inaugurated its first flight from Ho Chi Minh City to Nha Trang on the southern coast. It said all safety regulations were followed.
A company spokeswoman refused to comment on the fine Friday, but confirmed the local beauty queens were paid for their performance. She would not give her name because she was not authorized to speak to the media.
Privately owned Vietjet Air was founded in 2007 and operated its first flight in December.