The Cyprus-based agency beat off competition from GCI, Grayling Momentum, Promax and Promoseven Weber Shandwick to win the business, which also includes managing the airline's communications in Central and South Asia.
The decision will come as a blow to Promoseven Weber Shandwick which handled the PR for BA in the UAE, Bahrain, Qatar, Kuwait, Oman and Saudi Arabia before the review took place.
BA decided in March to consolidate its agency representation across the region in a bid to cut costs.
Action's remit will include the Gulf states, the Levant and Iran. The account, which will be co-ordinated from the company's lead offices in Cyprus and Dubai, also covers Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, India, Uzbekistan and Bangladesh.
Action, which has worked with BA for more than 30 years, was the carrier's incumbent agency in Central Asia, the Levant and Iran before the review. It also represents the airline in Eastern Europe.
Tony Christodoulou, managing director of Action, told Campaign that the agency's aim was to "protect" the BA brand through aggressive media and PR work.
"British Airways enjoys a formidable brand preference in the Gulf and Middle East region, reflecting its reputation as a high-quality, full-service airline," he said.
"Our aim is to protect this remarkable brand, with each of our country account teams working in close partnership with their BA counterparts, ensuring that BA's sales and marketing programmes receive the strongest possible support through an aggressive media and public relations campaign."
He added: "To have finally won the account for the premier airline brand after a hard fought pitch process against exceptionally fierce competition is very satisfying indeed."
Abi Moore, public relations manager for BA in Asia and the Pacific, said that the ob- jective of the tender was to ensure that the airline was getting value for money by consolidating the number of suppliers it worked with over a wide region.
Meanwhile, Terry Parry, BA's Dubai-based marketing manager for the Middle East, North Africa and Central Asia, has been moved to become the airline's business development manager for the Middle East and Pakistan.
In the UAE, BA has been involved in stiff competition with Emirates and new entrant Virgin Atlantic for the lucrative Dubai to London route. In May the airline launched its most comprehensive advertising campaign in the Middle East, which it said had been commissioned in response to the increasingly competitive nature of the airline market in the region.
The pan-Arab campaign was launched just two months after Virgin Atlantic started flights to London and Abu Dhabi's Etihad Airways increased its services to the UK.