Air New Zealand's latest promotion has bombed, with the airline accused of transphobia over a "joke" suggesting disgraced female Belarusian shot putter Nadzeya Ostapchuk has testicles.

The company launched a Christmas Cracker promotion on its Grabaseat site on Monday, giving people the chance to win prizes.

Those who don't win a prize get a consolation joke instead - with one reading: "What large heavy ball was responsible for Valerie Adams' gold medal? The Belarusian's left testicle."

The so-called joke is a reference to Ostapchuk winning - and later being stripped of - the shotput gold medal at the Olympics earlier this year after testing positive for a banned steroid.

The medal was later awarded to Kiwi shotputter Adams.

Air NZ has taken a hammering on social media, with Twitter users calling on it to apologise for the "unbelievably offensive" joke, and pledging to boycott its services.

Rather than apologise, Air NZ responded by tweeting: "not everyone likes our xmas cracker jokes so tell us your tacky kiwi jokes & we'll add our favourites into the cracker".

Air NZ is not the first company to face a backlash over mocking Ostapchuk's gender and fall from grace.

Sandwich chain Habitual Fix took a hammering in August after creating a poster with a picture of Ostapchuk to sell its "manwich", featuring the catchlines "no added hormones or steroids" and "no hidden a-genders".

The latest Air NZ blunder comes just a month after the airline made headlines by giving spooky names to its domestic destinations for Halloween, with the South Island's Blenheim becoming "Beastheim".

The town - where serial sex offender Stewart Murray Wilson committed crimes over 26 years that saw him dubbed "the Beast of Blenheim" - was not amused.

Air NZ axed Beastheim from the promotion.