Brahim’s Airline Catering was heavily dependent on MAB, which contributed a whopping 50% of its revenue.
PETALING JAYA: It is a double whammy for recently delisted in-flight caterer Brahim’s Holdings Bhd now on the brink of losing its 25-year contract with Malaysia Airlines Bhd (MAB).
The Practice Note 17 (PN17) company was delisted on June 3, 2023, after Bursa Malaysia rejected its appeal for more time to submit its regularisation plan.
“Risk is always there,” group chief executive officer Mohd Fadhli Abdul Rahman said, admitting that its in-flight catering service, Brahim’s Airline Catering Sdn Bhd (BAC), was heavily dependent on MAB, which contributed a whopping 50% of its revenue.
The rest comes from 35 foreign carriers and Brahim’s is eyeing four more, he told Bernama recently.
It was reported that MAB’s parent company, Malaysia Aviation Group (MAG), and BAC could not agree on the terms when renewing the contract.
Brahim’s fell into PN17 category in 2019 and recovery efforts were hit by the Covid-19 pandemic. PN17 is issued to companies in financial distress.
BAC’s catering capacity is 60,000 meals. It was producing an average of 55,000 meals per day before the pandemic. This plunged to 218 meals per day during the pandemic although this has climbed to 32,000 meals per day today, said Fadhli.
MAB was contributing a monthly revenue of about RM12mil from 2003 until its pre-Covid-19 days with minimal price adjustment versus RM8mil today, an amount it stands to lose in the event MAG ends the contract on June 30, 2023.
Foreign caterers combined contributed RM6mil per month, he said.
Plans are in place to negotiate with vendors and the management will return to the drawing board on other non-value-added expenses, he said.
“We are also looking to explore other businesses such as retail and commercial markets to ensure business remains sustainable,” said Fadhli. Will MAB dispose its 30% stake? Obviously, a break-up with MAB is not Brahim’s desired outcome, said Fadhli.
