Malaysia Airlines may take over Brahim’s catering unit for RM129 million

23 August 2023

Malaysia Aviation Group (MAG)’s Malaysia Airlines will have to pay up to RM129 million, excluding any goodwill, to take over Brahim’s Holdings Bhd’s in-flight catering unit Brahim’s Food Services Sdn Bhd (BFS).

The New Straits Times (NST) learnt that an independent consultant, believed to be Deloitte Malaysia, has valued the whole of BFS at between RM162.8 million and RM184 million.

Sources said Brahim’s is ready to sell its 70 per cent stake and it is up to MAG to fully own BFS’ in-flight kitchen with its manpower, expertise and foreign airline clients.

MAG currently owns the remaining 30 per cent stake.

The NST also learnt that BFS and MAG’s unit Malaysia Airlines Bhd have yet to finalise a new three-year in-flight catering agreement that is supposed to be signed before the end of this month. “With less than 10 days left, anything could happen. If the contract is not signed by the end of the month, then it’s most likely over between them,” one source said.

Malaysia Airlines and BFS had last month extended their contract from July 1 to Aug 31.

Malaysia Airlines is believed to have already activated its Business Continuity Plan to offer alternative food and beverages options on flights by setting up temporary in-flight kitchen in the compounds of Kuala Lumpur International Airport (KLIA).

It is understood that several tents have been set up in the vicinity of KLIA as a temporary in-flight kitchen with MAG’s ground handling unit AeroDarat trucks and white-coloured vans parked alongside the kitchen.

The trucks will be used to deliver the in-flight meals to Malaysia Airlines’ flights operating out of KLIA Terminal 1.

BFS, meanwhile, wants the original three-year (with an option of another two additional years) agreement be changed to five years without the termination for convenience clause which it dubbed as an unfair term.

Sources said the in-flight meals onboard Malaysia Airlines starting Sept 1 will possibly not be served by BFS if the contract is not signed.

Currently, BFS is serving in-flight meals to all Malaysia Airlines flights out of KLIA except to Tokyo and London. The in-flight meals for the two destinations are provided by Pos Aviation Sdn Bhd. “It’s best if these parties think long term for the sake of the passengers.

The question is can Malaysia Airlines do it themselves? Or will they realise after some time that they need support and then maybe return to BFS?””If that happens, then would BFS want new terms in the agreement? Would the prices remain?” another source asked.

Running an in-flight catering kitchen takes more than just ensuring the meals are prepared on time, the source added.

The NST had first reported on June 15 that BFS and Malaysia Airlines were ready to put an end to their turbulent 26-year relationship due to a disagreement in their new contract.

The disagreement was due to the “termination for convenience” clause that the national carrier had added into the agreement.

On June 25, the Ministry of Finance stepped in to patch the rift between Malaysia Airlines and BFS by asking them to extend the contract for another two months after June 30 for further negotiations.

On July 3, MAG told the NST that it had received an agreement from BFS on June 28 to extend their services for another two months.

Source: www.nst.com.my

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