MAG ‘moves on’ from 25-year partnership with Brahim’s Food Services

 

Malaysia Airlines has fully restored its in-flight meal service, complete with beverage offerings and full hot meals, effective today.

PETALING JAYA: Malaysia Aviation Group (MAG) has placed the issue of buying out Brahim’s Holdings Bhd’s 70% stake in Brahim’s Food Services (BFS) on the backburner and is instead pursuing the idea of setting up its own airline catering unit.

“MAG has moved on,” group managing director Izham Ismail said when queried by reporters on talks with Brahim’s over BFS during the launch of the full reinstatement of Malaysia Airlines’ in-flight meals service today.

Previous news reports said Deloitte Malaysia had valued Brahim’s 70% stake at up to RM129 million, with BFS valued between RM162.8 million and RM184 million. MAG holds the balance 30%.

Pressed if the group had intention to sell its 30% stake, Izham declined to comment. News reports had previously indicated that Brahim’s was ready to sell its 70% stake to MAG.

Izham Ismail.

Instead, Izham said the group – the parent company of national carrier Malaysia Airlines Bhd – is currently evaluating the potential of setting up its own catering unit. It has invited prospective international technical and financial partners to participate in the venture, he added.

FMT Business has learnt there is currently little progress on MAG’s potential acquisition of Brahim’s 70% stake. The sticking point is BFS’ valuation which has not been finalised, hence MAG’s decision on “walking its own catering path”.

Hiccups and disgruntled passengers

MAG’s contract with the catering company ended on Aug 31 after more than 25 years. The transition to directly managing its in-flight catering service led to a host of hiccups and many disgruntled passengers on certain routes.

MAG has since then established a temporary distribution centre – the MAG Catering Operations (MCAT) – to manage the assembly of F&B items and the uplifting of meals onboard.

The cooking is done by its nine partners, namely MAS Awana (60% owned by MAG), Sajian Ambang Sdn Bhd, Syed Food Industry Sdn Bhd, QL Kitchen Sdn Bhd, Fantastic Food Factory Sdn Bhd, AlQina Cuisine, Cosmic Culinary Food Solution, Kopetro (Koperasi Petronas), and Wanmalinja Food Industries Sdn Bhd.

Izham clarified that at present all cooking is done by its partners. “They will cook and freeze it. We will bring it to MCAT, and then move it to the planes.”

The airline is now self-handling an average of 18,000 meals daily, collaborating with its partners, and equipped with 24 hi-lifts, six freezers, two chillers and two ware wash machines.

Izham reveals the new arrangement has resulted in a slight increase of 0.5% from an initial catering cost of 2% of its total operational cost during its partnership with Brahim’s.

“That’s money we are investing to ‘wow’ customers,” he said, adding that it’s worth the investment.

He added that MAG can roll out new menus in a timely manner now.

“In the airline business, it’s highly competitive. We need to continuously innovate products. Speed is important to us, and we will continue to improve our offerings as time progresses.

“It has been a painful and tough journey. Ultimately MAG remains steadfast that we need to be profitable and sustainable for the future,” he added. - FMT