According to the Gold Coast Bulletin this happened after the newspaper intervened on behalf of the frustrated 76-year-old.
Musgrove had booked a cheap, special return airfare from Brisbane to Goa in India with Air Asia almost a year ago.
But the budget carrier cancelled his flight in April — when it axed the Kuala Lumpur-Goa route — and he had spent the past three months trying to get a full fare refund of A$641.69.
This caused him further problems as he had booked a further A$3,500 worth of connecting flights and hotel nights in other countries which were reliant on him getting to Goa.
He said because of the cancellation, his holiday had become more expensive.
While happy about finally getting a result and thankful to the Gold Coast Bulletin, Musgrove said it had been a stressful three months.
According to the report AirAsia had initially declined his refund request and then after multiple arguments via email the airline told him a refund would be processed within 30 working days.
After the Gold Coast Bulletin inquired, AirAsia promised to send the refund within seven days.
The report quoted Musgrove as saying he would never book with AirAsia again.