After rolling out its food and farm retail outlets, Mukesh Ambani’s Reliance Retail is now looking to launch its captive cargo or freighter services to ferry fresh fruits and vegetables from various sourcing destinations in North India early next year.

Aircraft manufacturer Boeing is said to be among the front-runners for the 50-odd cargo aircraft order to be bought through sale-lease-buyback process by the Reliance group. Aviation industry analysts note that apart from strengthening Reliance’s logistics chain, its entry into the cargo market would alter the structure of this relatively nascent industry.

Currently, there are only eight dedicated freighters ferrying cargo within and in and out of the country. Reliance’s foray will make the fleet size in the cargo segment jump over seven times from what it is today. Several domestic carriers, including Jet Airways, Kingfisher, Air Deccan, GoAir, and national carriers Air India and Indian are looking to enter this space over the next one year.

Besides Reliance, various big-ticket retailers such as Tata group, Birla group, Bharti and Kishore Biyani’s Future Group are lining up to purchase cargo aircraft to backward integrate their supply chain logistics.

Aviation analysts do not rule out domestic carriers joining hands with some of the retail players to jointly launch cargo services in the country. Express delivery firms DHL and Blue Dart Express and national carrier Indian are the biggest players in the domestic cargo space.

When contacted, Reliance Industries did not comment on its plans for its dedicated freighter services. However, sources close to the development said a team lead by VK Mehra, ex-engineering head of Air India, has been working on the details over the last six months.

“The full-fledged launch of the cargo services is expected towards the year-end or early next year by when its retail foray reaches critical mass,” said a source. Plans include using smaller air strips in various states and setting up a dedicated airport for cargo in Punjab to ferry fresh vegetable and farm product to retail outlets across the country.

The buzz around air cargo in India is expected to increase in the coming years. According to Airbus’ market outlook for the next 20 years, the number of dedicated freighters in India will go up from the current eight to around 165 aircraft by 2025.

International airlines such as Cathay Pacific, Etihad Cargo and Sri Lankan Airlines too have been increasing numbers of their freighter aircraft. The airfreight cargo in India has risen from about 4.9 lakh tonnes in 2000-01 to over 14 lakh tonnes in 2004-05.

According to a research report by Edelweiss Securities, the Rs 2,200-crore courier industry and the Rs 4,000-crore express segments are expected to grow 20-25% a year in India. The government too is keen to promote the air cargo industry.

The civil aviation ministry has set up an inter-ministerial group (IMG) to provide suggestions to expedite and improve cargo trade at domestic airports. Civil aviation minister Praful Patel has indicated that the government is looking at progressively liberalising the air cargo sector, with plans to allow 74% FDI.