How much is a KrisFlyer mile worth?

(Updated November 2017)

The value of a Singapore Airlines KrisFlyer mile, such a vexed question…

We’ve heard many ranging estimates on this over the years, from wildly too low, to absurdly too high. Truth is…

…it’s personal

How much a KrisFlyer mile should be valued at, is actually down to you. That’s because it effectively depends:

• how you usually use them, and
• what your alternative would be if you couldn’t.

But this is a long article. So spoiler alert, let’s get to the basic conclusion first, then please feel free to read on if you want to read our analysis, and hear our justification.

We value Singapore Airlines KrisFlyer miles at about S$0.02 (2 cents) each It’s a conservative valuation. If you redeem in premium classes, you will usually achieve a higher rate. You will not lose money, in our opinion, assuming this rate for most redemptions, even in economy class. We personally achieve an average value of 2.87 cents per mile, based on analysis of almost 1 million miles redeemed over the last two years. KrisFlyer miles are worth a lot less, and can even be worth nothing, if you use them stupidly. Usually, but not always, this applies to non-flight redemptions.

The analysis

Part 1

We’ve broken down the theoretical value analysis to two main components, what is:

• the minimum value you can basically guarantee from your miles
• the value can you can expect to achieve when redeeming award flights in the various cabin classes

Part 2

We’ve also added further information about ‘buying’ miles, whether it’s worth doing so, what alternatives cashback credit cards bring, and also how redemption bookings differ from ‘cheap’ full fare bookings by examining:

• earning miles with a credit card (it’s not free)
• how to offset the earnings rate from full fare SIA tickets
• the flexibility of redemption tickets

Part 3

Finally, we present:

• the value we have personally achieved using our own miles over the last two years
• the ceiling price at which you should ‘buy’ KrisFlyer miles

Part 1

How much do Singapore Airlines think a KrisFlyer mile is worth?

A measly 1.02 cents. That’s because it’s what they’ll give you off any full fare ticket when you choose to part-pay with miles. While this offers great flexibility, as an award redemption does not have to be available, it doesn’t represent good value, and you should probably never do it.

To cut the price of a one-way business class ticket from Singapore to Dubai by $515.98, for example, would cost you 50,568 KrisFlyer miles. You would still have over $2,800 left to pay. Since a one-way ‘Saver’ redemption in business from Singapore to Dubai is 45,000 miles + S$35.90 in taxes, this is nonsensical.

Of course, you would only go down the part-pay with miles route if a redemption was not available, and you needed to travel. However, Emirates is offering a non-stop business class flight on their A380 on the same route and the same day for S$2,786, less than you’d be paying to fly on Singapore Airlines having already forked out over 50,000 miles for the ‘discount’.

Assuming the Singapore Airlines redemption was not available, and you would be happy with the Emirates option, use of part-pay with miles in this case actually gives them a negative value.

Is it ever useful?

Granted, we picked an obvious ‘waste of miles’ example there. If you have miles expiring which you cannot use as there are no redemptions available, having considered extending your miles for 6 months (or having exhausted that option already), this is a possible way to get at least some value from them. It is a slightly better rate than you will achieve converting your miles to Scoot vouchers, for example.

Also, while derisory in value, the discount for part payment with KrisFlyer miles is helpful in one sense. It means if you can ‘buy’ KF miles for less than 1.02 cents each (call it 1 cent or less), you basically cannot lose out. Whether you should part with more than 1 cent per mile when ‘buying’ depends on how you use them, i.e. your own personal valuation. More on that later.

Non-flight redemptions

If you want an even poorer rate for your miles, just head to the KrisShop, where you can buy a wide range of price-inflated items and instead of using cash, redeem your KrisFlyer miles for 0.8 cents each. There’s almost no excuse for this, please never do it.

Currently KrisShop are promoting the new 256GB iPhone X, which you can pre-order and pick up on your next flight, but they will only let you pay with miles and are giving you just 0.7 cents per mile versus the retail price of the phone (S$1,888).

For the same number of miles, you could redeem a return suites redemption from Singapore to New York, or fly return business class to Sydney twice.

What value we think you can actually achieve

We examined a trio of short to medium-haul trips (Bali, Hong Kong and Shanghai) and a trio of long-haul trips (Auckland, Zurich and Los Angeles) originating in Singapore, and assessed the value of each one as a round-trip redemption on the basis of four different preference assumptions to determine the cents per mile valuation of the redemption.

• A1 – You would only be willing travel on Singapore Airlines, and would buy a full fare ticket on the same route with SIA, if the redemption was not available.
• A2 – You would only be willing to travel on an alternative cheaper (non-SIA) flight if it was still non-stop, and operated by a full service carrier.
• A3 – You would be willing to travel on an alternative cheaper (non-SIA) flight, with one stop, operated by a full service carrier (for long-haul, the business class product would have to be of a similar service standard and seat layout to Singapore Airlines).
• A4 – You would be willing to travel on an alternative cheaper (non-SIA) flight if it was still non-stop, but operated by a low-cost carrier (applicable for short to medium-haul economy class only, including pre-payment for 1 checked bag, a drink and a meal, for fair comparison).

You generally book each short to medium-haul flight 3 months out, and the long-haul flights 6 months out. You are only willing to book a ‘Saver’ category redemption, otherwise you pay full fare.

Full fare tickets are also assessed outside any holiday periods, if you can redeem during peak periods (when fares are higher, but redemptions will also be harder to come by) you will achieve a higher value than shown.

Economy class

Bali return (SIN-DPS-SIN)

Saver Redemption: 15,000 miles + $53.80

• A1 – Cost $283.80 (1.53c/m) SQ nonstop
• A2 – Cost $266.00 (1.41c/m) KL nonstop
• A3 – $269.11 (1.44c/m) MH via KUL
• A4 Cost $265.00 (1.41c/m) TZ nonstop

Hong Kong return (SIN-HKG-SIN)

Saver Redemption: 30,000 miles + $78.10

• A1 – Cost $688.10 (2.03c/m) SQ nonstop
• A2 – Cost $688.10 (2.03c/m) SQ nonstop*
• A3 – Cost $459.00 (1.27c/m) MH via KUL
• A4 – Cost $520.00 (1.47c/m) TZ nonstop

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in economy

Shanghai return (SIN-PVG-SIN)

Saver Redemption: 40,000 miles + $52.40

• A1 – Cost $827.40 (1.94c/m) SQ nonstop
• A2 – Cost $814.00 (1.90c/m) MU nonstop
• A3 – Cost $597.00 (1.36c/m) MH via KUL
• A4 – Not applicable

Auckland return (SIN-AKL-SIN)

Saver Redemption: 56,000 miles + $98.50

• A1 – Cost $1,318.50 (2.18c/m) SQ nonstop
• A2 – Cost $1,178.50 (1.93c/m) NZ nonstop
• A3 – Cost $949.00 (1.52c/m) MH via KUL

Zurich return (SIN-ZRH-SIN)

Saver Redemption: 76,000 miles + $82.10

• A1 – Cost $1,142.10 (1.39c/m) SQ nonstop
• A2 – Cost $1,142.10 (1.39c/m) SQ nonstop*
• A3 – Cost $815.00 (0.96c/m) QR via DOH
• A4 – Not applicable

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in economy

Los Angeles return (SIN-NRT-LAX-NRT-SIN)

Saver Redemption: 76,000 miles + $162.70

• A1 – Cost $1,346.80 (1.56c/m) SQ nonstop
• A2 – Cost $1,308.00 (1.51c/m) UA nonstop
• A3 – Cost $879.00 (0.94c/m) CZ via CAN
• A4 – Not Applicable

Premium economy class

Firstly, a note about premium economy redemptions Premium economy redemptions are not a good way of using KrisFlyer miles, and that’s not just because we don’t like the product (we don’t, by the way), it’s because in miles terms it’s simply too expensive. Singapore Airlines price their premium economy redemptions just below business class, which is a farce, not only when you look at the difference in product and service, but also when you see the difference in price. Take a flight from Singapore to San Francisco for example, a round-trip ticket on the non-stop service with Singapore Airlines booked 6 months from now in premium economy would set you back S$3,418.90. Business would be $7,318.90, a massive jump in cost of 114% (more than double). However, if you want to book a round-trip saver redemption with KrisFlyer for your flight it’s going to set you back 130,000 miles in premium economy, and 176,000 miles in business class, only a 35% increase. It doesn’t take a rocket scientist to work out that you’re getting a much better deal redeeming in business than in premium economy on this route.

Bali return (SIN-DPS-SIN)

Cabin not operated on this route

Hong Kong return (SIN-HKG-SIN)

Saver Redemption: 45,000 miles + $78.10

• A1 – Cost $958.10 (1.96c/m) SQ nonstop
• A2 – Cost $649.00 (1.27c/m) CX nonstop
• A3 – Not applicable

Shanghai return (SIN-PVG-SIN)

Saver Redemption: 60,000 miles + $52.40

• A1 – Cost $1,572.40 (2.53c/m) SQ nonstop
• A2 – Cost $1,572.40 (2.53c/m) SQ nonstop*
• A3 – Not applicable

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in premium economy

Auckland return (SIN-AKL-SIN)

Saver Redemption: 90,000 miles + $98.50

• A1 – Cost $2,598.50 (2.78c/m) SQ nonstop
• A2 – Cost $2,598.50 (2.78c/m) SQ nonstop
• A3 – Not applicable

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in premium economy

Zurich return (SIN-ZRH-SIN)

Saver Redemption: 125,000 miles + $82.10

• A1 – Cost $2,642.10 (2.05c/m) SQ nonstop
• A2 – Cost $2,642.10 (2.05c/m) SQ nonstop*
• A3 – Cost $2,467.00 (1.91c/m) CX via HKG

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in premium economy

Los Angeles return (SIN-NRT-LAX-NRT-SIN)

Saver Redemption: 130,000 miles + $162.70

• A1 – Cost $2,958.60 (2.92c/m) SQ via NRT
• A2 – Not applicable
• A3 – Cost $2,269.00 (1.62c/m) BR via TPE

Business class

Bali return (SIN-DPS-SIN)

Saver Redemption: 35,000 miles + $53.80

• A1 – Cost $1,103.80 (3.00c/m) SQ nonstop
• A2 – Cost $588.00 (1.53c/m) KL nonstop
• A3 – $954.00 (2.57c/m) MH via KUL

Hong Kong return (SIN-HKG-SIN)

Saver Redemption: 55,000 miles + $90.10

• A1 – Cost $1,790.10 (2.95c/m) SQ nonstop
• A2 – Cost $1,790.10 (2.95c/m) SQ nonstop*
• A3 – Cost $1,253.00 (2.11c/m) TG via BKK

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in business

Shanghai return (SIN-PVG-SIN)

Saver Redemption: 70,000 miles + $52.40

• A1 – Cost $3,502.40 (4.92c/m) SQ nonstop
• A2 – Cost $2,402.00 (3.36c/m) MU nonstop
• A3 – Cost $1,553.00 (2.14c/m) MH via KUL

Auckland return (SIN-AKL-SIN)

Saver Redemption: 116,000 miles + S$98.50

• A1 – Cost $5,498.50 (4.66c/m) SQ nonstop
• A2 – Cost $5,498.50 (4.66c/m) NZ nonstop
• A3 – Cost $3,899.00 (3.28c/m) MH via KUL

Zurich return (SIN-ZRH-SIN)

Saver Redemption: 170,000 miles + S$82.00

• A1 – Cost $5,882.00 (3.41c/m) SQ nonstop
• A2 – Cost $5,705.00 (3.31c/m) LX nonstop
• A3 – Cost $3,667.00 (2.11c/m) TK via IST

Los Angeles return (SIN-NRT-LAX-NRT-SIN)

Saver Redemption: 176,000 miles + S$150.80

• A1 – Cost $6,418.90 (3.56c/m) SQ via NRT
• A2 – Cost $6,203.00 (3.44c/m) UA nonstop
• A3 – Cost $5,011.00 (2.76c/m) OZ via ICN

First / suites class

A note about first / suites redemptions One of the easiest ways to generate a very high assumed ‘value’ for a KrisFlyer mile, is a redemption into first / suites. That’s not only because the cost of the ticket is very high, but also that there are very few cheap first class alternatives with other carriers on most routes. If you manage to secure a return suites saver redemption from Singapore to London two months from now for example, it’s arguably worth S$13,500, as that’s what the ticket would cost. The only alternative on the route, British Airways, is still expensive at S$12,000. The best indirect option is with Etihad at S$10,500. None of these are cheap. The redemption cost with Singapore Airlines is 230,000 miles + S$394.40. It generates a theoretical miles value of 5.70 cents per mile versus the Singapore Airlines fare, 5.05 cents per mile against the British Airways fare, and 4.39 cents per mile against the Etihad fare. All pretty impressive returns. The problem is, the tickets are only worth that if you would be prepared to pay your own cash for them, and the vast majority of people simply would not. The redemption doesn’t therefore translate to a ‘true’ cash saving, as you wouldn’t have been prepared to part with that amount of money for the ticket, had the redemption not been available. First / suites is therefore more of an ‘experience’ for 99% of people, and will have a different value to each person because their alternative travel plans would all differ in cost. We’ve presented the assumed value here anyway, but take it with a pinch of salt.

Bali return (SIN-DPS-SIN)

Cabin not operated on this route

Hong Kong return (SIN-HKG-SIN)

Saver Redemption: 75,000 miles + $90.10

• A1 – Cost $4,490.10 (5.87c/m) SQ nonstop
• A2 – Cost $4,490.10 (5.87c/m) SQ nonstop*
• A3 – Not applicable

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in first

Shanghai return (SIN-PVG-SIN)

Saver Redemption: 100,000 miles + $52.40

• A1 – Cost $6,152.40 (6.10c/m) SQ nonstop
• A2 – Cost $6,152.40 (6.10c/m) SQ nonstop*
• A3 – Not applicable

* Notes: A2 – SIA is already the cheapest full fare carrier on this route in first

Auckland return (SIN-AKL-SIN)

Saver Redemption: 160,000 miles + S$98.50

• A1 – Cost $10,398.50 (6.43c/m) SQ nonstop
• A2 – Not applicable
• A3 – Not applicable

Zurich return (SIN-ZRH-SIN)

Saver Redemption: 230,000 miles + S$82.10

• A1 – Cost $14,382.10 (6.22c/m) SQ nonstop
• A2 – Cost $13,238.00 (5.72c/m) LX nonstop
• A3 – Cost $10,212.00 (4.40c/m) EK via DXB

Los Angeles return (SIN-NRT-LAX-NRT-SIN)

Saver Redemption: 236,000 miles + S$162.70

• A1 – Cost $16,018.60 (6.72c/m) SQ via NRT
• A2 – Not applicable
• A3 – Cost $12,527.00 (5.24c/m) EY via AUH

Summary

Crunching the numbers, the following table shows the average value per mile, by travel habit assumption. Just to recap on the A1-A4 travel assumption meanings:

• A1 – You would only be willing travel on Singapore Airlines, and would buy a full fare ticket on the same route with SIA, if the redemption was not available.
• A2 – You would only be willing to travel on an alternative cheaper (non-SIA) flight if it was still non-stop, and operated by a full service carrier.
• A3 – You would be willing to travel on an alternative cheaper (non-SIA) flight, with one stop, operated by a full service carrier (for long-haul, the business class product would have to be of a similar service standard and seat layout to Singapore Airlines).
• A4 – You would be willing to travel on an alternative cheaper (non-SIA) flight if it was still non-stop, but operated by a low-cost carrier (applicable for short to medium-haul economy class only, including pre-payment for 1 checked bag, a drink and a meal, for fair comparison).

The table speaks for itself – for A1 and A2 type travellers, if you split your redemptions equally between economy and any of the higher classes throughout the year, you will easily achieve an average of over 2 cents per mile. This is particularly true for long-haul travel in the business class cabin, where closer to 4 cents per mile will be the norm.

For A3 type travellers, who are less fussy about their routing and the particular airline when a redemption isn’t available, you really need to be redeeming in business class or first class to achieve good value from your miles (i.e. more than 2 cents per mile).

Part 2

Credit card miles are ‘free’ aren’t they?

We’ve lost count of how often we’ve heard this. It’s great to think that every time you are spending on your credit card, either in Singapore or overseas, you’re being showered with a load of free points or miles from the goodness of the banks heart. But you’re not. And there’s one primary reason: cashback credit cards.

As practically every bank in Singapore has one of these, they’ll no doubt offer you one too if you want one. And because cash is returned to you as you spend, instead of miles being awarded, the miles aren’t free.

Put simply, with a miles-earning credit card, you are losing out on cashback to earn miles instead. That means you’re paying for them.

So are cashback cards a good alternative to miles-earning cards?

Let’s look at an example. A good ‘simple’ cashback credit card in Singapore at the moment, the Standard Chartered Unlimited Cashback Credit Card, gives 1.5% cash back on all transactions, with no monthly cashback limit, and its fee-free for the first two years – so let’s say for simplicity there’s no annual fee.

‘Joe’ thinks he’s pretty smart and uses this card for all his annual credit card spending (S$60,000 per year). He’ll net $900 cash back over the year, which is great because he’s going to use it to pay for his flight tickets to Istanbul with Singapore Airlines for his vacation with ‘Eve’ next year.

But Eve reckons she’s even smarter than Joe. She’ll also spend S$60k on her credit card over the year, but she signed up for a Citi PremierMiles Visa Card, and instead of cashback will get 1.2 KrisFlyer miles for every dollar she spends in Singapore, and 2.4 miles for every dollar spent overseas.

The card came with a 10,000 miles sign up bonus and no annual fee for the first year. Eve doesn’t travel much so she spent only $7,000 on foreign currency transactions during the year, and the rest in Singapore. After 12 months, she’s netted 90,400 Citi miles (10,000 bonus + (53,000×1.2) + (7,000×2.4)).

She then finds she has to pay S$25 to transfer them into her KrisFlyer account, so overall she has ‘paid’ 1.02 cents per mile ($925/90,400 – because otherwise she would have no miles, but would now be $925 richer, like Joe).

Now it comes to booking the flights for their vacation. Joe is not too impressed to find that, booking three months out, in order to fly the non-stop round-trip Singapore Airlines flight to Istanbul will set him back $1,274.20 even with the Economy Super Saver fare.  His cashback has gone some way to paying for the trip, but he’ll still have to dig into his own pockets for an extra $374 to make it work.

There are a few ways this can play out for Eve:

Scenario 1 – Saver Redemptions available on both flights

Eve is thrilled with this, not only is a saver redemption seat available in both directions for the flights of their choice, it’s only setting her back 50,000 miles and $54.20 in taxes and fees. That’s given her 40,400 miles left over to use towards next year’s trip. At this rate, she’ll be good for another round-trip to Turkey in just a few months! Joe is unimpressed.

Scenario 2 – Saver redemption available only one-way, standard the other way

Joe can look a little more smug this time, as Eve will have to make a ‘standard redemption’ for the outbound flight, and a ‘saver redemption’ for the return. This increases the miles required to 80,000, plus the same $54.20 in taxes. But as she’s accrued 90,400 – she’s ok with it. Not much left over for next year though – a starting point of 10,400 miles.

Scenario 3 – Only standard redemptions are available in both directions

Now Joe is laughing a little, at Eve’s expense. Her only way to use her miles for the trip will be to redeem one-way, for 55,000 miles + $34.00 on the outbound, or 55,000 miles + $20.20 on the way back. She’ll have to buy a one-way full fare ticket for the other sector. Sure it’s not ideal – but she still has 35,400 miles in her account to use next year doing it this way.

Eve is about to find out, however, that all is not well with this plan. On full service scheduled carriers, one-way flights are often almost as expensive as return trips. She’ll need to pay $910 to join Joe on the flight from Singapore to Istanbul, then redeem on the way back, or redeem on the way out and pay $791 to join him for the flight home.

Scenario 4 – No redemptions are available at all on the route for the days they want to travel

Now Joe feels really happy with his decision to forgo airline miles in favour of the true currency of travel – dollars and cents! Eve’s method of collecting airline miles has backfired – she will now have to fork out over $1,200 to join Joe on the same flights to Turkey. However she does still have those 90,400 miles in her KrisFlyer account, ready to use for a future trip.

Those miles will sit there forever until she’s ready to use them, surely? Not quite. The minute the miles were deposited into Eve’s account, the clock started ticking. KrisFlyer miles expire three years after you earn them. The cash in Joe’s bank account, by comparison, isn’t going anywhere.

Nonetheless Eve isn’t deterred – she has to fork out the cash for the flights this year, but she sticks with the credit card, certain the miles game will pay off for her next year.

A year goes by and once again Joe is faced with topping up his cashback to pay for this ‘expensive’ Istanbul flight. Eve’s done some searching on KrisFlyer though – and it’s good news. This time there’s more award availability, and Eve finds not only can she easily redeem in economy, she can actually fly business class this time, using a business saver redemption. She’s got 180,800 miles to spend, earned over 2 years, and it’ll only cost 90,000 miles + $54.20 in taxes.

A full-fare ticket would otherwise have set her back $7,454.20 return. Amazing!

Not wanting Joe to feel left out of course, as she’s a good friend and she’s got the points anyway, she kindly redeems a business saver for him too.

So the moral of the story is – cashback cards are bad?

Not exactly. As the story ultimately highlights, cash is truly flexible, but it’s potential when it comes to airline tickets is rather limited. It would take Joe the best part of a decade to come anywhere close to $7,500 cashback with his spending pattern, so Eve is truly achieving something out of his normal reach by using a miles-earning credit card, even with the same spending. In fact, as many of you will notice, she actually had enough miles to redeem one business class return seat to Istanbul after the first year alone.

There are many cashback credit cards out there in Singapore, some with very attractive ‘headline’ rates, but when you examine the detail a little closer most are bogged down with category caps and cashback limits, making it very hard to take full advantage as once these limits are reached the cashback often falls to pitiful rates on subsequent spending.

Very few people are so disciplined to keep a close enough eye on their spending to make these cards work best for them, which is why we used a ‘simple’ cashback card in our example.

If you truly will never use an airline redemption, and don’t see the KrisFlyer scheme ever working for you, by all means have a cashback credit card. But as ardent supporters of this ‘hobby’, we can’t honestly recommend them. They will never open doors to otherwise unattainable Singapore Airlines flight experiences.

There is great value and true satisfaction about putting your feet up in a first or business class seat, for next to nothing compared with advertised fares. A miles-earning credit card opens up a world of opportunities in this regard. Yes, we are biased. Yes, cash is king. But miles can have real value if used correctly, and once you make it work for you, despite its frustrations, the miles game is fun.

Offsetting the earning rate

Full fare (cash) tickets on Singapore Airlines also earn KrisFlyer miles, but award redemptions do not.

It’s something to take into account when assessing the value of a mile, but only when your alternative to redeeming on SIA would be to actually pay for a full fare ticket with SIA. If your alternative cash ticket is with Qatar or Finnair for example, there will be no KF miles earned back from these bookings.

If you booked a cheaper full fare ticket with another Star Alliance airline, you could be earning some KrisFlyer miles for the trip, but that’s getting a bit complicated!

So for example, you want to take a business class return trip from Singapore to Frankfurt using your miles. If the award had not been available, and your true alternative would have been to pay a cash fare in business on the same Singapore Airlines flights, then one has to also account for the miles you would earn from booking the full fare cash ticket, when calculating the value of the miles on this trip.

If the Saver award is available both ways, your 170,000 miles are saving you S$5,800.00 on the usual cash fare, 3.41 cents per mile, which sounds pretty good. But hang on, if you booked the cash fare you would also earn 15,968 miles, so it’s really costing you 185,968 miles to book the redemption. That dilutes the earning rate a little, to 3.12 cents per mile. Still good of course, but not as good.

If you hold KrisFlyer Elite or PPS Club status, the redemption gets a bit worse as you are forfeiting even more miles – you would earn 19,960 miles for the same cash ticket because of your 25% status bonus, so it’s really costing you 189,960 miles to book the redemption, a value of 3.05 cents per mile.

All of this still sounds good, after all 3 cents+ per mile is normally far above what you obtained them for. But what if a ‘saver’ redemption is not available in either direction, just a standard category redemption? As you’ll now have to fork out 240,000 miles for the trip, the value per mile becomes 2.27 cents for regular KF members, and 2.23 cents for KF Elite Silver and above status members.

Again remember that this all assumes Singapore Airlines is your only airline choice, and you will fly with them regardless, which makes you a very fussy customer – most people will seek a cheaper fare with another airline if they cannot redeem with SIA, and this reduces the ‘value’ of the miles.

Note that in Part 1 of this article, where we looked at the value of miles you can expect to achieve, no allowance has been made to factor in the value of the miles you would earn where the valuation was based a Singapore Airlines full fare ticket as the alternative.

Another consideration: Flexibility

Award tickets on Singapore Airlines are extremely flexible, unlike most cheap economy fares and even some cheaper business class tickets, which can still carry costly amendment or cancellation penalties. For example, on an award booking:

• If you need to change the date of your flight, assuming there are still award seats available on the date you want to change to, that’s free.
• If you need to change the route, cabin class or award type, that’s only US$20.
• If you need to refund the ticket completely, and have the miles re-deposited into your account, that’s US$30 (or just US$15 if you hold KF Elite Silver or higher status).

It is not easy to find a cheap revenue ticket with this level of flexibility. It means that, provided you have enough miles, you can lock in redemption tickets as an ‘insurance policy’ for a probable trip as soon as they become available, knowing it is inexpensive to cancel even the day before travel if you’ve changed your plans, find an alternative, or just can’t go.

We do this regularly, taking advantage of the typically good availability just under a year in advance to lock in a business or suites redemption. Usually for us it’s a gamble because we haven’t secured the annual leave for that period yet, but it’s only a $30 gamble. Granted it does mean doing some advance planning, and it requires a healthy miles balance.

How it could work for you

Let’s say you planned to be in Melbourne for an event 11 months from now, but it was only 50% certain that the event would go ahead, or perhaps that you would be able to secure the annual leave.

In this case you would be mad to part with the S$913.40 it would cost for the cheapest non-refundable, non-changeable return economy fare, as there’s a good chance you’ll never use it and would simply lose the money.

You would have to book a flexible economy ticket, at S$1,363.40, which allows for cancellation before the first flight departs for a fee of US$150 (about S$200). Notice you’ll still take quite a hit if this doesn’t work out!

The alternative of course, assuming it’s available, is an award redemption, which comes with even better flexibility ‘built in‘. The cost is 56,000 miles + S$143.40.

As you then sit on your award flight to Melbourne 11 months later, assuming the trip goes ahead, you can’t honestly say the miles you used were only worth 1.38 cents each, against the cheapest economy return fare, because you wouldn’t have been able to book that ticket 11 months ago, since for this trip you needed the flexibility, and couldn’t risk losing $900.

Realistically, you must compare the miles used against the flexible fare when assessing the value, meaning that your miles in this case achieved 2.18 cents each.

Note that in Part 1 of this article, where we looked at the value of miles you can expect to achieve, comparison for economy fares was all based on the cheapest non-refundable economy tickets. Generally you will get nothing back if you cancel these, or your plans change, unlike the award redemption, which is flexible.

Part 3

The value we have personally achieved

Between us, we burned through 909,000 KrisFlyer miles in the last two years. It’s a decent sample, so we entered the whole lot into a spreadsheet, and applied a very boring, but what we consider very fair and conservative methodology about the true value of each flight we took.

The result was, we achieved an average value of 2.87 cents per mile.

The methodology

This is the really boring but quite important bit. In order to fairly assess the value of our redemptions, we had to honestly look at what our alternative would have been had those redemptions not been available. That means assessing them against the best value, but still realistic full fare cash booking. The summary of the methodology, and the individual award value calculations, are shown in the following PDF document:

Achieved Miles Value Table (PDF, 45kb)

The best and the worst

We usually redeem in business (15 out of the 20 trips), and occasionally in first / suites (2 trips) and economy (3 trips).

The worst value redemption we made during the last two years, which even shocked us a bit as we’re supposed to be good at this, was a Phuket to Singapore flight with SilkAir in economy. It was worth just 1.27 cents per mile.

In hindsight, this wasn’t really very clever, but the full fare on the same flight was very expensive, and the cheaper alternatives (on which the valuation is based) had inconvenient flight timings for us, so personally it made sense. Also, as we were relatively “miles rich” at the time, it didn’t seem a big hit to take for the added convenience.

The best value redemption was the obvious standout route – Cape Town. It’s a well-known redemption “sweet spot” on the SIA network, as the miles rate is low and the cost of getting there in business, even via the Middle East, is quite high. As we would never consider economy on such a long flight, this had a true value to us of 5.80 cents per mile (based on the best alternative cost of a full fare Qatar Airways flight in business class via Doha).

We actually achieved slightly better than this because we got in on that redemption before the March 2017 KrisFlyer devaluation, but as stated on the PDF above we have recalculated all the miles rates and taxes to those which apply today, not the ones we may have paid at lower levels.

At what rate should I ‘buy’ KrisFlyer miles?

What rate you should set as your ceiling when ‘buying’ KrisFlyer miles depends on how you use them, i.e. your own personal valuation. As we alluded to earlier, buying at anything less than 1 cent per mile is a no-brainer – you basically can’t lose out.

If you use your miles only to redeem into economy class, be careful buying at anything over 1.5 cents per mile as you may not realise a good return when it comes to redemption.

If you generally use your miles to redeem into business class, you should not lose out buying at 2.3 cents per mile or less.

Our personal ceiling for ‘buying’ KrisFlyer miles is 2 cents per mile, because we know we can achieve a higher return than that, closer to 3 cents on average. The reason we would not ‘buy’ at a higher rate is that KrisFlyer miles simply do not have the flexibility of cash.

We can usually secure the redemptions we want, as we either book a long way in advance or travel during off-peak periods, but like anyone we cannot guarantee a redemption will be available, and sometimes we have to fall back on a cash ticket. In this case the cash is more useful, and the miles we would have used are simply ‘parked’ for a future trip.

Buying at a ‘known discount’ on their value (again based on our personal valuation, yours will depend how you use them), also protects against a future devaluation of the scheme.

A 33% devaluation of KrisFlyer miles in one go would be unheard of, but if it did happen we could at least be satisfied that we didn’t ‘buy’ any miles at a higher value than we can still realise from them (i.e. we should still achieve 2 cents per mile instead of 3 cents with our redemption types and travel patterns, if a 33% devaluation occurred).

If we bought all our miles at an average of 2.5 cents per mile, and this devaluation scenario then played out, we’d be making a loss.

Conclusion

If you’ve made it this far – well done! Writing a 5,000-word piece to answer what most would assume is a fairly simple question was not my intention when I began this article. Hopefully the detail goes some way to helping you determine what your own valuation and cut-off point for ‘buying’ KrisFlyer miles is. In summary:

• The value of a mile is personal. It depends how you usually use them, and what you would do instead if you couldn’t.
• If you redeem only in economy class, you’ll probably achieve 1.5-2 cents per mile, but it can be more (in peak periods, but when redemptions are still available), and it can be less (during sales, or when used on routes with inexpensive cash fares).
• If you mix your redemptions between economy and business class, you should achieve at least 2 cents per mile on average.
• If you redeem almost exclusively in business or first class, especially on long-haul flights, you should achieve about 3 cents per mile, potentially more on some routes.
• If you use your miles for non-flight redemptions, you will achieve pitiful rates. Avoid at all costs.
• We personally value KrisFlyer miles, conservatively, at 2 cents per mile, as we would not ‘buy’ miles above this cost.
• We actually achieve about 2.9 cents per mile when we use them, based on analysis of almost 1 million miles redeemed over the last two years.

(Updated November 2017)