India's Discount Airlines Get Vistara as Upscale Rival

India is one of the world’s toughest aviation markets, with high state taxes making jet fuel the costliest in Asia and market share-hungry upstarts offering base fares as low as 2¢ per flight. Over the past seven years the subcontinent’s airlines have lost $22 on average every time a passenger has stepped on board, estimates consultant Capa Centre for Aviation. That’s $10 billion in losses. Yet newcomers keep taking off for a simple reason: The annual number of domestic air travelers is expected to triple to 159 million in the decade ending in 2021.

Rather than joining the fare-cutting frenzy, Vistara, a joint venture of Singapore Airlines and Indian conglomerate Tata Group that begins service on Jan. 9, hopes to woo some of those new flyers by offering premium services—42 inches of legroom in its business class cabin, 17 special meal options, and a frequent-flyer program that awards points based on customers’ spending rather than miles flown.