MAS Privatisation

[Craig 0]

On 9/2/2023 at 5:23 PM, Alif A. F. said:

Any of you in MH flights post-Brahim? How was the meal like?

A friend of mine sent me a KUL-India daytime J class meal. Let's just say there was a plastic wrapped Gardenia wholemeal bread, maybe a dessert tart from Family Mart, and chickpea curry served with rice in an aluminum container (no it wasn't plated - business pax are expected to eat out of the aluminum container). I guess I forgot that MH's Brahims contract also meant that Brahim will wash all the dishes/plates for MH. 

 

3 hours ago, jahur said:

There's rumor that the transition period will take up to 6months(not exactly confidence building). Instead of extending the contract with brahim until takeover. They rather outright exit promptly. 

If they do not take over Brahim's, I expect it to be much longer. I can't imagine starting an airline catering company from scratch will be easy (building, crew training, procurement, certification etc.). MH can't just hire a few kenduri caterers and cook it under a tent and deliver it to planes.

If they end it abruptly with Brahim, Brahim will bleed even more and MH is probably looking at a hostile takeover when Brahim is desperate.

[Craig 0]

17 minutes ago, Kee Hooi Yen said:

 

Was onboard MH122 SYD-KUL on 2/9. Not sure if the food was catered from kitchen in KUL. The lunch presentation was very disappointing and the food I had (curry chicken with rice) was not to my taste.

Anyway, it has been long time since my ride with MAS (my last flight was pre-COVID). So I can't tell if this is post-Brahim thing or it is the ordinary MAS standard nowadays ?

SYD is too far for it to be back-catered. It's uplifted from SYD. Back when MH uploaded their menu online, I recall that a few stations were back-catered (i.e. KUL catered for the outbound and inbound MH flight). I recall distinctly that stations such as BKK and DPS was never back-catered where as stations such as HKT, HKG (just after covid), SGN was back-catered. I might be wrong tho.

[jahur 0]

2 hours ago, Craig said:

SYD is too far for it to be back-catered. It's uplifted from SYD. Back when MH uploaded their menu online, I recall that a few stations were back-catered (i.e. KUL catered for the outbound and inbound MH flight). I recall distinctly that stations such as BKK and DPS was never back-catered where as stations such as HKT, HKG (just after covid), SGN was back-catered. I might be wrong tho.

Seems they contracted all foreign stations to cater the meals now for the time being. No more return flight catered is an obvious thing unless one wants to have bread and fruit on both legs lol. Exceptions for domestic for flights leaving BKi KCH which has its own catering from mas awana.

[KK Lee 5]

12 hours ago, jahur said:

Nope they're unable to supply adequately unless an expansion is made on their end. As for other central kitchens there's certain standard guidelines that you need to follow. You also cant simply out of the blue contract 7e, mcd and family mart unless certain certs and procurement policy has been set. Ana's domestic inflight serving of KFC for example the meals are prepped very differently than kfc Japan's meals on the restaurant as one example. Ba's one off kfc meal was an emergency dispensory and waivered. 

Current AK order is less than pre-pandemic level, AK's vendor has excess capacity. Besides, brahim termination was in the work for many months if not years, MH did visited them and a few others a while ago and had time to prepare.

Other central kitchen in kv may not have flight catering experience but are haccp, halal, etc compliance. It is a matter of priority; whether full compliance, fixed menu, pax without meal or some other agenda is more important?

Edited September 3, 2023 by KK Lee

[jahur 0]

1 hour ago, KK Lee said:

Current AK order is less than pre-pandemic level, AK's vendor has excess capacity. Besides, brahim termination was in the work for many months if not years, MH did visited them and a few others a while ago and had time to prepare.

Other central kitchen in kv may not have flight catering experience but are haccp, halal, etc compliance. It is a matter of priority; whether full compliance, fixed menu, pax without meal or some other agenda is more important?

Since when did Malaysia effectively organized things effectively and collectively. You would think Santan was willing to block 40% of its production for MAG? Note they have contacted many times even prior to pandemic and after as well.  

The industry here its every man for himself while the gov is on autopilot. Stuff that do not need an inch of tinkering they tinker but stuff in need of dire intervention is left out to rot. No one even bothered to expand Pos Aviation catering when Brahim was having problems.

Edited September 4, 2023 by jahur

[Fairul 0]

this was over the weekend, KUL-KCH

1. the crews distribute the box using the normal cart, two big box filled with these snack box in it.

2. no beverage service

3. Crew didnt collect back the snack box. overheard pax infront of me at 28B asked the crew " Miss, kotak ni tak collect ke"  crew answered " its ok..biar je kt seat..nanti dah land cleaner bersihkan"

4. There was a 2nd run, seems the crew want to finish all the snack box for that flight. so end up pax tapaw many boxes

5. during disembark, the plane was bit in a mess, blue boxes everywhere. 

6. Saw the same box left in the J seat as well. 

 

Edited September 4, 2023 by Fairul

[Robert 0]

5 hours ago, jahur said:

Since when did Malaysia effectively organized things effectively and collectively. You would think Santan was willing to block 40% of its production for MAG? Note they have contacted many times even prior to pandemic and after as well.  

The industry here its every man for himself while the gov is on autopilot. Stuff that do not need an inch of tinkering they tinker but stuff in need of dire intervention is left out to rot. No one even bothered to expand Pos Aviation catering when Brahim was having problems.

Frankly it's disgrace that its ended up like this. Yes people can make excuses add politics etc but look at to from a passenger and reputational perspective it a disaster. If there was no other viable option then they should have stayed with Brahims until they had a sensible plan. 

Although not MH - It's just like the aero train, wait until it's broke, only then start working on a plan and then that goes wrong. No proper airport style  bus and only after it's a sh*#show so they add some proper airport bus types. 

Somebody should be fired for this mess 

[KK Lee 5]

2 hours ago, jahur said:

Since when did Malaysia effectively organized things effectively and collectively. You would think Santan was willing to block 40% of its production for MAG? Note they have contacted many times even prior to pandemic and after as well.  

The industry here its every man for himself while the gov is on autopilot. Stuff that do not need an inch of tinkering they tinker but stuff in need of dire intervention is left out to rot. No one even bothered to expand Pos Aviation catering when Brahim was having problems.

Believe that particular vendor submitted quite a few proposals in many years, nothing happened, and MAG couldn't commit the contract tenure justified for further investment

As for Pos Aviation, flight catering is unintended step son, the controlling shareholder is not interested in this business.

 

[Robert 0]

and the bloggers etc are now running with the story 

https://onemileatatime.com/news/malaysia-airlines-catering-mess/?fbclid=IwAR0NW0_PLUZxVb57pRndCGeap1uVS6_O1Satk6rJ9WE5hV58HM2zn8s-nKE

[jahur 0]

4 hours ago, Robert said:

Frankly it's disgrace that its ended up like this. Yes people can make excuses add politics etc but look at to from a passenger and reputational perspective it a disaster. If there was no other viable option then they should have stayed with Brahims until they had a sensible plan. 

Although not MH - It's just like the aero train, wait until it's broke, only then start working on a plan and then that goes wrong. No proper airport style  bus and only after it's a sh*#show so they add some proper airport bus types. 

Somebody should be fired for this mess 

Its basically 2 egotistical company that felt they've been conned by each other. 1 angry being conned by a severe bad contract since early 2000s. The other angry that the catering contract has been cut and adjusted few times now down to low ball level being unsustainable to the company as a whole and the main client decides to run off cause they could not agree to the buyover rate for years. Now they're just waiting to see who will mati katak first. Meanwhile passengers and frontline staffs are on the receiving end of this stupid mess. The longer this drags on gradually this becomes a national embarrassment.

There was another rumor on about that renewing the contract with brahim would mean another 3 years with them. It just so happens mid this year was the day to renew and the gov ask MAG to extend a further 2 month exit clause.

Edited September 4, 2023 by jahur

[jahur 0]

New info on catering fiasco
Mh needs about 20k+- meals per day just for KUL

-Brahim able to uplift 52k with about 10k reserved for foreign airlines.
-Pos aviation currently able to uplift only 1.1k-1.5k meals for mh
-mas awana able to uplift 6-10k meals but not authorised to enter airside ramp nor operate catering truck as they don't have license.
-MAG currently only has 8 catering vans/vans able to enter airside. 
-MAG ordered 20 new catering trucks around march this year still haven not arrive.
-6 other vendors also not authorised to enter airside or operate catering vehicles.

So what happens with the delays is meals are being uplifted using aerobridge to slot in food causing delay. While there's only authorised 8 trucks capable of meal lifting just for kul and some from pos aviation. 

 

Some of the pricing issues Brahim regional catering charge issue
Pak lah days regional charge u get rm50-70 for a economy class nasi lemak plus 25 years of very long contract.

2012 Ahmad Jauhari adjusted lowered but not significant.

2014 Mas to Mab with MAS act enforce price lowered to rm30.

2018 another revision lowered to rm18

Late 2022 brahim inform MH that it need increase by 30% from the rm18 but maintain same serving quality. Ingredient inflation by pandemic bas been cited as the reason for the cost increase. Mag was not happy citing MAS awana and santan can efficiently do a lower rate but Brahim has said it is still lower than the rates Suvarnabhumi and Changi charges.

Also MAG was not happy that as per external financial evaluation Brahim should not be bought over for than RM50mil but brahim is adamant on selling for RM190mil. 

MAG Decides for hostile takeover.

Edited September 5, 2023 by jahur

[Robert 0]

25 minutes ago, jahur said:

New info on catering fiasco
Mh needs about 20k+- meals per day just for KUL

-Brahim able to uplift 52k with about 10k reserved for foreign airlines.
-Pos aviation currently able to uplift only 1.1k-1.5k meals for mh
-mas awana able to uplift 6-10k meals but not authorised to enter airside ramp nor operate catering truck as they don't have license.
-MAG currently only has 8 catering vans/vans able to enter airside. 
-MAG ordered 20 new catering trucks around march this year still haven not arrive.
-6 other vendors also not authorised to enter airside or operate catering vehicles.

So what happens with the delays is meals are being uplifted using aerobridge to slot in food causing delay. While there's only authorised 8 trucks capable of meal lifting just for kul and some from pos aviation. 

 

Some of the pricing issues Brahim regional catering charge issue
Pak lah days regional charge u get rm50-70 for a economy class nasi lemak plus 25 years of very long contract.

2012 Ahmad Jauhari adjusted lowered but not significant.

2014 Mas to Mab with MAS act enforce price lowered to rm30.

2018 another revision lowered to rm18

Late 2022 brahim inform MH that it need increase by 30% from the rm18 but maintain same serving quality. Ingredient inflation by pandemic bas been cited as the reason for the cost increase. Mag was not happy citing MAS awana and santan can efficiently do a lower rate but Brahim has said it is still lower than the rates Suvarnabhumi and Changi charges.

Also MAG was not happy that as per external financial evaluation Brahim should not be bought over for than RM50mil but brahim is adamant on selling for RM190mil. 

MAG Decides for hostile takeover.

Thanks. Any issue if I use some of this on other groups (without your name)?

On another matter Im wondering if the snack boxes given out last month were actually a test run for what's happened? 

[KK Lee 5]

37 minutes ago, jahur said:

New info on catering fiasco
Mh needs about 20k+- meals per day just for KUL

-Brahim able to uplift 52k with about 10k reserved for foreign airlines.
-Pos aviation currently able to uplift only 1.1k-1.5k meals for mh
-mas awana able to uplift 6-10k meals but not authorised to enter airside ramp nor operate catering truck as they don't have license.
-MAG currently only has 8 catering vans/vans able to enter airside. 
-MAG ordered 20 new catering trucks around march this year still haven not arrive.
-6 other vendors also not authorised to enter airside or operate catering vehicles.

So what happens with the delays is meals are being uplifted using aerobridge to slot in food causing delay. While there's only authorised 8 trucks capable of meal lifting just for kul and some from pos aviation. 

 

Some of the pricing issues Brahim regional catering charge issue
Pak lah days regional charge u get rm50-70 for a economy class nasi lemak plus 25 years of very long contract.

2012 Ahmad Jauhari adjusted lowered but not significant.

2014 Mas to Mab with MAS act enforce price lowered to rm30.

2018 another revision lowered to rm18

Late 2022 brahim inform MH that it need increase by 30% from the rm18 but maintain same serving quality. Ingredient inflation by pandemic bas been cited as the reason for the cost increase. Mag was not happy citing MAS awana and santan can efficiently do a lower rate but Brahim has said it is still lower than the rates Suvarnabhumi and Changi charges.

Also MAG was not happy that as per external financial evaluation Brahim should not be bought over for than RM50mil but brahim is adamant on selling for RM190mil. 

MAG Decides for hostile takeover.

Airside catering truck is a critical path of supply chain and expect 20 units delivery within 6 months is too optimistic.

RM 190m is likely outstanding bank loan of controlling shareholders.

 

[JuliusWong 0]

22 minutes ago, KK Lee said:

Airside catering truck is a critical path of supply chain and expect 20 units delivery within 6 months is too optimistic.

RM 190m is likely outstanding bank loan of controlling shareholders.

I would think Khazanah Nasional has a final say if MAG is allowed to buy the rest of 70% controlling stake in Brahim Co. Due diligence check and wiring the money will need some time too. And if they do buy into Brahim Co., what will happen to the catering contract for the other 34 airlines that they are currently supplying?

[jahur 0]

1 hour ago, Robert said:

Thanks. Any issue if I use some of this on other groups (without your name)?

On another matter Im wondering if the snack boxes given out last month were actually a test run for what's happened? 

Sure but my info needs a bit of adjustment after ive watched this below

From the looks of it some of the extra info.
1998 to 2003 MAS Catering left a RM230mil debt hole that Brahim tookover. With no experience in airline catering Brahim was asked to join with LSG Skychef. MAS retains 30% share and signs 25 year contract with limited tinkering available during tenure.
2011 MH then CEO AJ who just came in noted the catering contract sign is a huge mess and misstep for MAS as a whole.
2013 Previous losses made by Mas Catering overturned and profit starts coming in for Brahim catering's revenue as a whole. Same time nationalization effort the gov forced Brahim to absorb the remaining shares LSG holds. LSG begrudgingly let go the remaining shares after Brahim paid them.
2014 MH twin tragedies.
2015 MAS act came in catering contract cancelled and redo with 40-50% cut with renamed airline MAB. 5+5 year deal with 1st phase renewal in 2020. SATS came in for 49% stake in Brahim tries some reorganization effort and investment opportunities in Malaysia aviation catering industry.
2016 SATS acquires 49% for RM220 mil.
2018 Further revision Catering contract pricing for MAB. Brahim begins to bleed. Should be the time where the regional economymeal has been reduced to RM18 per head.
2020 Pandemic from 50k meal uplift capability down to just 1k meals served per day. Further losses. MAB forces Brahim to sign new deal but for 3+3year meaning 2023 renew contract
2022 SATS disposes its 49% stake for RM10mil from the original. Brahim enters PN17.
late 2022 Brahim informs MH they'll be a 30% increase in catering cost due to inflation. MAG argues other vendors have been able to keep cost near competitive. Brahim offers MAG to buyover the remaining shares for RM219mil. External audit deems Brahim only worth not more than  RM50-60mil ringgit. Brahim argues MH owes them RM70mil meanwhile MH argues Brahim owes them nearly RM20mil for poor meal quality .
Early 2023 MH starts preparing the catering mishap INADEQUATELY.
mid 2023 MH promptly exits the catering contract without following any exit clause. Khazanah told them to follow the exit clause with at least 2months notice.
 

 

Edited September 5, 2023 by jahur

[KK Lee 5]

38 minutes ago, JuliusWong said:

I would think Khazanah Nasional has a final say if MAG is allowed to buy the rest of 70% controlling stake in Brahim Co. Due diligence check and wiring the money will need some time too. And if they do buy into Brahim Co., what will happen to the catering contract for the other 34 airlines that they are currently supplying?

As a business entity, mag catering should be glad to continue supplying to other airlines.

Given how brahim was setup, the controlling shareholders is unlikely to let go without full settlement of outstanding bank loan.

[JuliusWong 0]

13 minutes ago, KK Lee said:

As a business entity, mag catering should be glad to continue supplying to other airlines.

Given how brahim was setup, the controlling shareholders is unlikely to let go without full settlement of outstanding bank loan.

It will be crazy for Brahim Co to expect the buyer(s) to buy all the debts that Brahim Co has incurred given the current circumstances. Brahim Co itself is desperate to sell their inflight catering division since it is loosing money.

[jahur 0]

2 hours ago, Robert said:

Thanks. Any issue if I use some of this on other groups (without your name)?

On another matter Im wondering if the snack boxes given out last month were actually a test run for what's happened? 

Those snack boxes are there because non of the vendors are authorised to even cleanup the plates and utensils and are probably a trial run as well before actual exit. So its resorting to disposableware something that can be dispose immediately. Mas Awana was taken out of lounge meal duty is also in prep for this prompt exit but this company is not well equipped in certain license such as vehicle operation and so. I believe it was only early this year that MH knew Brahim would not budge in a peaceful takeover nor approve another set of catering contract renegotiation. The prompt exit from what i see from my point of view is an attempt to let Brahim die of hunger to let them know they cant survive with a loss of 20k meal uplift and as a result will force brahim to agree with what they put on the table in terms of takeover pricing. 

Edited September 5, 2023 by jahur

[JuliusWong 0]

1 hour ago, jahur said:

Those snack boxes are there because non of the vendors are authorised to even cleanup the plates and utensils and are probably a trial run as well before actual exit. So its resorting to disposableware something that can be dispose immediately. Mas Awana was taken out of lounge meal duty is also in prep for this prompt exit but this company is not well equipped in certain license such as vehicle operation and so. I believe it was only early this year that MH knew Brahim would not budge in a peaceful takeover nor approve another set of catering contract renegotiation. The prompt exit from what i see from my point of view is an attempt to let Brahim die of hunger to let them know they cant survive with a loss of 20k meal uplift and as a result will force brahim to agree with what they put on the table in terms of takeover pricing. 

Jahur, your insider's news is close to what I was informed. Sadly the public does not know what is happening and has happened behind the scene, for them they will only bash MH.

[Robert 0]

2 hours ago, jahur said:

Those snack boxes are there because non of the vendors are authorised to even cleanup the plates and utensils and are probably a trial run as well before actual exit. So its resorting to disposableware something that can be dispose immediately. Mas Awana was taken out of lounge meal duty is also in prep for this prompt exit but this company is not well equipped in certain license such as vehicle operation and so. I believe it was only early this year that MH knew Brahim would not budge in a peaceful takeover nor approve another set of catering contract renegotiation. The prompt exit from what i see from my point of view is an attempt to let Brahim die of hunger to let them know they cant survive with a loss of 20k meal uplift and as a result will force brahim to agree with what they put on the table in terms of takeover pricing. 

I thought MAS Awana were providing the food for the MH International and Platinum lounges?

[jahur 0]

28 minutes ago, Robert said:

I thought MAS Awana were providing the food for the MH International and Platinum lounges?

Most of the food and beverages in the Golden Lounge been recently switched to Plaza Premium.

[KK Lee 5]

9 hours ago, jahur said:

Sure but my info needs a bit of adjustment after ive watched this below

From the looks of it some of the extra info.
1998 to 2003 MAS Catering left a RM230mil debt hole that Brahim tookover. With no experience in airline catering Brahim was asked to join with LSG Skychef. MAS retains 30% share and signs 25 year contract with limited tinkering available during tenure.
2011 MH then CEO AJ who just came in noted the catering contract sign is a huge mess and misstep for MAS as a whole.
2013 Previous losses made by Mas Catering overturned and profit starts coming in for Brahim catering's revenue as a whole. Same time nationalization effort the gov forced Brahim to absorb the remaining shares LSG holds. LSG begrudgingly let go the remaining shares after Brahim paid them.
2014 MH twin tragedies.
2015 MAS act came in catering contract cancelled and redo with 40-50% cut with renamed airline MAB. 5+5 year deal with 1st phase renewal in 2020. SATS came in for 49% stake in Brahim tries some reorganization effort and investment opportunities in Malaysia aviation catering industry.
2016 SATS acquires 49% for RM220 mil.
2018 Further revision Catering contract pricing for MAB. Brahim begins to bleed. Should be the time where the regional economymeal has been reduced to RM18 per head.
2020 Pandemic from 50k meal uplift capability down to just 1k meals served per day. Further losses. MAB forces Brahim to sign new deal but for 3+3year meaning 2023 renew contract
2022 SATS disposes its 49% stake for RM10mil from the original. Brahim enters PN17.
late 2022 Brahim informs MH they'll be a 30% increase in catering cost due to inflation. MAG argues other vendors have been able to keep cost near competitive. Brahim offers MAG to buyover the remaining shares for RM219mil. External audit deems Brahim only worth not more than  RM50-60mil ringgit. Brahim argues MH owes them RM70mil meanwhile MH argues Brahim owes them nearly RM20mil for poor meal quality .
Early 2023 MH starts preparing the catering mishap INADEQUATELY.
mid 2023 MH promptly exits the catering contract without following any exit clause. Khazanah told them to follow the exit clause with at least 2months notice.
 

 

When umno was all powerful, mas catering was carved out to enrich then dpm's family. RM230m debts in 2003 was largely bank loan from construction of klia facility. Brahim bought mas catering with leverage, hence, profit guaranteed clause.

Brahim management and cost structure was based on profit guaranteed business model, couldn't and wouldn't adapt to post 2015 reality. Some convenience shops approached Brahim for contract production; citing "pricing protocol" their quoted price was substantially higher than competitors, bluntly turned down new business.

If SATS couldn't turn around Brahim, no one else could. For this catering facility to be profitable again, need to remove top 3 layers of management.

 

8 hours ago, JuliusWong said:

It will be crazy for Brahim Co to expect the buyer(s) to buy all the debts that Brahim Co has incurred given the current circumstances. Brahim Co itself is desperate to sell their inflight catering division since it is loosing money.

Their objective and thinking is in a different planet; for reasons why most of these companies failed in the long term.

 

[JuliusWong 0]

Avolon Firms 20 A330neos, Converts 50 A320neos To A321neos

https://www.aerotime.aero/articles/leasing-firm-avolon-firms-a330neo-order-up-gauges-to-a321neo

Aircraft leasing firm Avolon has firmed an order for 20 A330-900neo aircraft that was announced during the Paris Air Show in June 2023 in the form of a Memorandum of Understanding (MoU). 

Avolon clearly has the A330ceo replacement market in mind, as confirmed by the company’s CEO, Andy Cronin, in a public announcement released on September 5, 2023. 

This order may have something to do with Malaysia Airlines, since the delivery of Avolon's previous order for nine A330neo were completed sometime ago.

 

[jahur 0]

MAG willing to bear short-term pain as it vows to take on legacy contract

 

MAG group managing director Datuk Captain Izham Ismail said its negotiation with BFS for an extension of the contract started in November last year, "but it was going nowhere".

"We couldn't come (to an agreement), knowing the fact that BFS has a monopoly in the local in-flight catering market,” Izham said, adding that the contract terms with BFS were "lopsided".

According to him, MAG had in its negotiation with BFS requested for a new clause where MAG will have a contractual right to terminate the agreement for any reason. “However, that negotiation is off the table now. To a certain extent, we had succumbed to a partner who is operationally inefficient and who tried to make margins by raising meals and handling charges to cover their inefficiency. So is it fair?

“We don't cook at all. There is no kitchen. And we don't have the expertise to cook meals in bulk. What our eight F&B suppliers do is cook the meals at their own facility, transport them to us, and all we do at the distribution centre is stack and distribute the food items [according to the flights] and then uplift them onboard the aircraft. Our suppliers don't have the licence and vehicles to load the meals into the aircraft.”

we had our ground handling subsidiary AeroDarat Services Sdn Bhd procure 20 catering high lifts. We currently have four high lifts [which is insufficient].”

“The first 10 catering high lifts will be delivered in the third week of September and the remaining 10 will come next month. With the delivery of the catering high lifts, we will improve our hot food offerings,” he said. The catering high lift is designed to carry and load containers with airline food for passengers.

 

Looks like the rough ride is up to October at least. Even past that meal consistency and offering is not up to mark until a proper vendor comes in. Service consistency is only when Brahim takeover or something similar to Brahim in terms of volume and production plan comes in. Another rumor about 2 more foreign airlines in KLIA may also be suspending its contract with Brahim and opting temporary catering in around November.

[Chris Tan 0]

1 hour ago, jahur said:

MAG willing to bear short-term pain as it vows to take on legacy contract

How noble of MAG to bear the short-term pain. Never mind the thousands of passengers who are putting up with this farce, or the Malaysians who are saddled with a national carrier that constantly sinks to new lows. Just pathetic.