A report in The Sydney Morning Herald says Malaysian budget carrier AirAsia X has weighed into the Australian airfare war by offering free flights to Kuala Lumpur - as long as the passenger pays the surcharges and taxes.

The airline is offering 5000 seats for $A137 ($NZ159) one way - the cost of the surcharges and taxes for the flight - from the Gold Coast to the Malaysian capital. 

The move marks the latest strike in the ongoing regional and domestic budget carrier war.

Last month, Virgin Blue announced a sale of 1000 flights on its Sydney-Port Macquarie route with airfares for one cent, including taxes and charges. Jetstar followed shortly after with its own one cent airfare sale for 5000 seats.

Tiger Airways responded the same day announcing 10,000 seats for $A10 each, broadening its sale to include all routes and less restricted travel times.

AirAsia X began flights from the Gold Coast in November last year, posing the first serious challenge to Jetstar on the route. The airline said the sale was to celebrate the airline's 100,000th passenger this month, who will win 10 free seats to be used over the next 12 months.