KUALA LUMPUR: The rift between Malaysia Airlines Bhd and Brahim's Holdings Bhd will likely be patched up by August as a mediator has stepped in to help the two companies reconcile.
The New Straits Times learnt that the Finance Ministry (MoF) acted as the mediator to mend the broken relationship between the national carrier and its main in-flight meals provider.
Sources told the NST that on Thursday, the MoF held a discussion with representatives of Malaysia Airlines' parent Malaysia Aviation Group (MAG) as well as MAG's sole shareholder Khazanah Nasional Bhd.
Representatives of Brahim's were also present at the meeting.The ministry asked Malaysia Airlines and Brahim's to extend their contract for another two months after June 30, 2023 to negotiate on a new agreement, particularly on the termination of convenience clause. "They're looking into finalising the contract within two months with a revision of the terminational (of convenience) clause," one of the sources said, adding that the discussions between the two companies would be regularly updated to the MoF.
The final decision for the new three-year contract between Malaysia Airlines and Brahim's will be made by the end of August.
The three-year contract with an optional two-year renewal was supposed to come into force on Jan 1 this year.
But the companies have failed to reach an agreement since they started discussions in September 2022.
Another source said no decisions had been made on the continuation of the contract after June 30 2023. The request to extend the contract is still being deliberated by both parties and will need an approval from the board of directors of each company.
On June 17, MAG told the NST that all in-flight services provided by Brahim's through Brahim's Food Services Sdn Bhd (BFS) will end on June 30.
"Malaysia Airlines regrets to confirm that the airline has been served with a notice of service discontinuation from BFS on June 6, 2023 for in-flight catering services in Kuala Lumpur which will indirectly end its legacy partnership on June 30, 2023.
""This notice indicates that all catering services provided by BFS on selected domestic and international routes on Malaysia Airlines' network will cease effective July 1, 2023," an MAG spokesman told the NST.
MAG said as part of its business continuity plan, it is now reviewing other local reputable F&B service providers to deliver in-flight offerings onboard Malaysia Airlines' flights departing from Kuala Lumpur International Airport (KLIA) Terminal 1.
The group is also looking into setting up in-house F&B services within its subsidiaries in the future.
This newspaper previously revealed that Malaysia Airlines would handle its own in-flight catering out of KLIA Terminal 1 using one of its sister companies, MAS Awana, if the airline and Brahim's failed to reach an agreement by June 30.
Sources said some in-house work, such as transporting meals to aircraft, would be sub-contracted to a new vendor as MAS Awana had not had the capacity to do all the work on its own.
The new vendor is believed to be Pos Aviation In-flight Catering, a subsidiary of Pos Aviation Sdn Bhd. MAS Awana, formerly MAS Catering (Sarawak) Sdn Bhd, has been catering in-flight meals for Malaysia Airlines, MASwings and foreign carriers at Kota Kinabalu International Airport in Sabah.
MAS Awana is reportedly 60 per cent owned by MAG and 40 per cent held by a Sarawakian investor.
Currently, BFS is supplying some 20,000 meals per day to Malaysia Airlines while some 12,000 meals daily are provided to its other clients such as Emirates, Qatar Airways and All Nippon Airways.
It is learnt that Pos Aviation can only produce less than 10,000 meals per day.