* AirAsia to receive $87.7 mln from SATS deal
* Airline plans to sell leasing arm, Expedia JV stake
* Sales will fund special dividends: CEO (Adds analysts' estimate for special dividend, share price rise)
SINGAPORE, Oct 31 (Reuters) - AirAsia Bhd on Tuesday said it plans to sell more stakes in non-flying businesses to fund special dividends to shareholders, after announcing a new ground handling joint venture (JV) with Singapore's SATS Ltd.
The low-cost carrier, which expects S$119.3 million ($87.7 million) in proceeds from the SATS deal, is close to selling some or all of its aircraft leasing arm and its remaining 25 percent stake in a travel booking joint venture with Expedia Inc , its founder and Group CEO Tony Fernandes said.
The airline will also consider the sale of stakes in its food, engineering and duty free businesses in the future, although no talks on those have begun, Fernandes said.
"We are going to special dividend those things out," he told Reuters after a media briefing on the SATS deal.
"There is a whole pipeline of those assets. We do joint ventures and eventually we will dispose of those joint ventures. They are not core. But the relationship will always stay."
Earlier this year, AirAsia got $100 million from the sale of a 50 percent stake in aviation academy Asian Aviation Centre of Excellence to CAE International Holding Ltd.
While Fernandes did not give details on the special dividend, analysts at Malaysia's Kenanga Investment Bank said it could be up to 0.11 ringgit a share after the SATS deal.
The optimism drove up the airline's shares by 5 percent, or 0.16 ringgit, to a close of 3.34 ringgit ($0.7893) on Tuesday, their biggest daily percentage rise since May.
Fernandes said he hoped to complete the sale of the leasing business, which two sources in March valued at $900 million, by the end of the year.
He said talks with potential buyers had dragged on because AirAsia wanted to ensure it had the right balance between receiving a high upfront price and ensuring its leasing costs were reasonable in the future.
"I think now we have got a very good deal which is a win-win situation," he said, without identifying the buyer.
Fernandes said he would prefer for AirAsia to keep a stake in the business rather than sell it entirely as it was doing with the SATS JV, but it was a decision for the board.
As part of the SATS deal, AirAsia will receive a 40 percent stake in ground handling at the new Terminal 4 at Singapore's Changi Airport, while SATS will get a 49 percent stake in AirAsia's Malaysian ground handling unit.
The pair will be targeting third-party ground handling contracts in Malaysia, and possibly in Indonesia, Thailand and the Philippines at a later date, SATS CEO Alex Hungate said.
"We get to use those assets for a broader base of customers and we get a better return on assets," he said.
AirAsia has ground handling operations at 15 airports in Malaysia but no third-party contracts at present. ($1 = 1.3607 Singapore dollars) ($1 = 4.2315 ringgit) (Reporting by Jamie Freed; Editing by Himani Sarkar)