The ads, on buses in Brisbane for close to a month according to news.com.au, read "Get off in Thailand. Fly direct from Brisbane to Bangkok."
The promotion has been called "harmful" and "sexist." and AirAsia has been accused of subliminally promoting sex tourism.
Along with its sandy beaches and majestic temples, Thailand is also known for its sex tourism. Although prostitution is illegal in the country, the government turns a blind and brothels frequented by both Thais and foreigners can be found in most major cities.
Although it's difficult to determine the number of sex workers in Thailand due to the vast demographics of the industry, a 2014 UnAids report estimates over 123,500 active sex workers.
AirAsia has since apologized for the mistake and assured that all related imagery will be removed immediately.
"AirAsia takes community feedback extremely seriously and the airline sincerely apologises for any inconvenience caused from recent concerns raised.
"AirAsia can confirm the advertising campaign has ended and we instructed our media partners to have the advertising removed as soon as possible today from all locations," a spokesperson told the BBC.