New | Hong Kong’s Regal Hotels International expands aircraft leasing business

Shares of Regal Hotels International Holdings opened higher on Thursday after news it has agreed to purchase four 11-year-old aircraft for US$14 million (about HK$109 million) to expand its aircraft leasing business amid a decline in mainland Chinese tourist arrivals in Hong Kong.

The firm, which owns five hotels in Hong Kong including Regal Airport Hotel, will buy four EMB-145 Embraer aircrafts from a wholly owned subsidiary of Embraer SA, an aircraft manufacturer engaged in management and marketing of Embraer aircraft, according to the company filing with the Hong Kong stock exchange on Wednesday.

Shares of Regal Hotels rose 0.26 per cent at HK$3.8 at 11 am.

The fleet of aircraft is currently leased to an airline operator in Mexico under leases at a monthly rent of US$342,000 and will expire in May 2017. The rents under the leases are payable in advance on a monthly basis.

Last year, Regal entered into a purchase agreement with Embraer to acquire a fleet of 18 passenger Embraer aircraft for US$84.7 million.

The Regal group completed the acquisition of 12 out of the 18 Embraer aircraft in February this year for US$34.5 million.