The AirAsia Group says it has served a letter of demand to Malaysia Airports Holdings Berhad and Malaysia Airports (Sepang) Sdn. Bhd. (MAHB) claiming MYR409 million (USD106 million) for losses and damages incurred during operations at Kuala Lumpur International's LCC Terminal as well as at the newer klia2.

Aside from alleged contractual breaches that have caused losses to the airline, AirAsia Group is also claiming damages for harm done to its brand and reputation as public perception, it says, "is that the failings of the facilities are within the control of AirAsia being the single largest operator of klia2."

The Group resisted moving to the new purpose-built LCC terminal, klia2, in May last year claiming the poor quality of workmanship on the taxiway/apron and runway had rendered the facility unfit for commercial use.

Last month, AirAsia management took to social media to condemn klia2 alleging that the terminal building's subsidence was causing cracks to appear on runways and pools of water to form on the tarmac.

For its part, MAHB says it is "surprised" by AAG's assertions given that Kuala Lumpur has helped nurture the Group from birth to its current size as the largest LCC Group in Asia.

"Malaysia Airports considers these claims to be baseless and will vigorously challenge them," it said. "We have already instructed our solicitors to look into the matter."

Government has launched an independent audit into the terminal with a report on pending issues to be issued “in due course.”