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AirAsia's chief executive officer Tony Fernandes said there were no casualties in the blaze, which started around 11.15am (Singapore time) and was extinguished just over an hour later.
'AirAsia has efficient evacuation plans in place and I am very pleased at how our emergency and crisis team responded that we managed to get everything back to normal within one hour,' he said in a statement.
AirAsia officials said the blaze occurred at a new section of the terminal currently under construction, but the fire department said it broke out at a duty-free store.
'It was a small fire... We scrambled two fire engines and 12 personnel,' a fire department operations room spokesman told AFP. 'We are investigating the cause.'
AirAsia officials said the fire produced thick smoke but failed to trigger the fire alarms. Staff nevertheless shepherded all those in the terminal outside the building.
AirAsia said flights scheduled for Friday 'might experience slight delays' buy that it did not expect any cancellations.
An eyewitness at the scene, 31-year-old businessman Cham Ze Hoe, said he joined a large crowd of people standing outside the terminal when he arrived to catch his flight but was prevented from going inside.
'I was stuck in a bus outside the LCCT and I thought it was a traffic jam... I got down from the bus and walked towards the terminal,' he told AFP.
'I could see smoke coming from the LCCT building. There were hundreds of people standing outside.'
The LCCT, which opened in 2006, is located 20 kilometres from the capital's main facility, the Kuala Lumpur International Airport. It is used by AirAsia as well as Cebu Pacific and Tiger Airways.
AirAsia on Thursday unveiled plans to shift to its own US$460 million (S$679.2 million) airport outside Kuala Lumpur and abandon the overcrowded LCCT, which it has rapidly outgrown.
The warehouse-style terminal, built at a cost of US$29.2 million, was designed to handle 10 million passengers a year.
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