Tuesday 23 Jul 2024
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KUALA LUMPUR (Sept 8): In-flight caterer Brahim's Holdings Bhd (BHB) said it has been approached by "quite a number of companies" to acquire its controlling 70% stake in Brahim’s Food Services Sdn Bhd (BFS) or to enter into a joint venture (JV) amid the recent termination of its long-standing catering contract with national carrier Malaysia Airlines Bhd (MAB). BHB currently holds a 70% stake in BFS, while MAB holds the remaining 30%.

"Yes, I am considering [the proposals]. We have not made any final decision on the matter. But the companies are local parties and one foreign party," BHB founder and executive chairman Datuk Seri Ibrahim Ahmad told a press conference on Friday.

Asked when he is expecting to complete the discussions and make a decision, he said: "Soon, I hope. For some of them, I have been discussing with them for over a month."

On Tuesday, Malaysia Aviation Group Bhd (MAG) group managing director Datuk Captain Izham Ismail said the airline group is contemplating buying the 70% stake it doesn’t already own from BHB. This follows the discontinuation of its long-standing partnership on catering services previously provided by BFS on selected domestic and international routes within the MAB network on Aug 31.

BHB currently provides catering services to 35 airline customers, including six of the Top 10 airlines in the world, namely Qatar Airways, Emirates, All Nippon Airways, Japan Airlines, Turkish Airlines and Korean Air. However, they make up only half of BHB's revenue as the remaining half was derived from its services to MAB.

"With MAB now out of the picture, we have to handle whatever excess [catering capacity] that we have [at our flight kitchen in the Kuala Lumpur International Airport (KLIA)]," said Ibrahim.

He added that BFS has invested so much in its kitchen facility that it is recognised as a seasoned industry player with a sophisticated, integrated food logistic supply chain. “The amount of food we supply to MAB, I don’t mean to brag but nobody else can supply the same level of quantity that we are supplying to MAB."

“All of us at Brahim's feel very sad looking at what is happening at KLIA. People are reaching out to me and complaining about food quality, as if I am the one to be partly blamed. 2025 will be Visit Malaysia Year where we are seeing a strong influx of flights after Covid-19,” said Ibrahim, adding that MAB has a responsibility to give travellers the best in-flight food and beverages.

Still, BHB remained hopeful that a mutually beneficial agreement could be reached between the two parties despite MAG, the parent company of MAB, ending the national carrier's catering contract with BFS on Aug 31.

Ibrahim conceded that it is a challenge to match the 50% revenue recognition the company had with MAG’s catering contract.

“Our relationship with MAB is still open. But no supplier with the right mind will agree to the termination convenience clause in the contract. One of the reasons we called for the press conference today [is] also [because] I do not want to be seen holding back any progress of this discussion,” Ibrahim said.

MAB is currently working with eight service providers for its in-flight meals, including its 60%-owned unit MAS Awana Services Sdn Bhd and Pos Aviation Sdn Bhd.

Edited ByAdam Aziz & Kang Siew Li
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