The pilot at Air Asiana, the country's number two carrier, was banned from flying for a month in 2014 after violating company policy by having a beard. He was allowed to return to work after shaving.
Seoul High Court said the policy -- which only applied to workers of South Korean nationality -- was illegal, turning over an earlier ruling by a lower court supporting the Air Asiana ban.
"The firm says that workers are required to maintain neat appearances...But there is no ground to believe that a beard makes one look untrustworthy or shabby," the high court said.
Dozens of foreign pilots and cabin crew at Air Asiana had facial hair but were not punished for it, the high court said.
The lower court had ruled in favour of the ban, saying airlines were allowed to enforce stricter policies on staff appearance than other businesses.
The pilot's beard became the subject of a legal battle after a local labour rights body said in 2015 that the Air Asiana policy was unlawful and the carrier had been wrong to discipline the pilot.
The pilot has not been named.
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