AirAsia will cease collecting the KLIA2 airport fees on behalf of the Malaysia Airport Holdings Bhd (MAHB) which manages the terminal.
AirAsia Group chief executive Tony Fernandes made the announcement during a live session on Facebook today.
"We are going to remove the KLIA2 fee next week, you're the first to hear it," he said.
AirAsia also collects a RM50 PSC charge on behalf of MAHB at KLIA2 but had refused to hike the amount after MAHB revised the figure to RM73.
The revision by MAHB was to standardise the charge between KLIA2 and KLIA.
AirAsia had argued against the hike pointing out that KLIA2 was meant to be a low-cost carrier terminal.
Earlier this month, it was revealed that MAHB had slapped AirAsia with an RM36.11 million suit demanding that the airline pay up for the PSC shortfall which it had refused to collect.