Why KrisFlyer Miles?
The best way and some say the only sensible way to utilise credit cards rewards points is to redeem them for air miles. It provides potentially more bang for bucks as compared to redeeming them for cash credit (See Credit Cards Reward Points Redemption Rates) or shopping vouchers even if you use a credit card that earns 4 miles per $1 spend (or 10X Rewards Points). With Singapore Airlines (SIA) being our only national flagship carrier, it is natural for Singaporeans to trade their hard earned rewards points for KrisFlyer miles. In fact, most banks in Singapore only allow cardholders to redeem their rewards points for only either SIA's KrisFlyer miles or Cathay Pacific's Asia miles.
How to Calculate Value of a KrisFlyer Mile?
Using the example of a Singapore return Economy flight to London above, one has to take the base fare (exclusive of airport/government taxes) of $930 and divide it by 76,000 miles which is the number of miles required to redeem the same flight. Rounding off the result to 2 decimal places will leave us with a value of 1.22 cents per mile if we were to make a redemption for a return Economy flight to London.
Note that $930 is the cheapest promotional base fare (Economy Lite) listed under Singapore Airlines flight deals while 76,000 miles is the required number of miles for a Saver Award redemption. Promotional deals for air fares and mileage redemption might vary from time to time which might result in different value for a KrisFlyer mile with the same calculation method.
Value of a KrisFlyer Mile for Different Flight
Using the same calculation method and conditions listed above, we have gone on to calculate the value of a mile if one were to redeem a Saver Award return ticket to London for various flight classes. From the numbers above, it is observed that there is greater value to be extracted from your hard-earned miles if you were to redeem for Business or First Class tickets due to base fares increasing almost exponentially along the flight class spectrum. It is also more advisable to redeem a Business Class flight ticket as compared to a Premium Economy flight ticket due to the big difference in the quality of service and product received when flying (considerably more legroom, greater recline, better legrests and headrests plus higher quality of food and beverages) but considerably smaller difference in the number of miles required for redemption (43% more miles).
Value of a KrisFlyer Mile for Different
Destinations and Flight Classes
Similarly, we derive the average value of a mile if one were to redeem a Saver Award return ticket (See SIA redemption chart) for various destinations and a summary of the results can be found in the table above.
*The average value of a KrisFlyer mile under the various flight class scenarios is derived from a full list of destinations available for each flight class and not only for the destinations listed in the table. SilkAir flights are excluded from the calculation due to the difference in quality of service and product rendered. (Refer to average value of a KrisFlyer mile for Economy Class, Premium Economy Class, Business Class and First Class for more information). The destinations listed in the table are typical examples of a short haul flight (Zone 2 Jakarta), a medium haul flight (Zone 7 Seoul) and long haul flights (Zone 11 London and Zone 12 Los Angeles)
From the results, we can safely conclude that short haul flights generally do not provide good value for your miles unless you are flying at least Business Class. Even then, you might not get much time to enjoy your short flight (at most 3 hours flight time for Zone 2 and 3 destinations).
Value of a KrisFlyer Mile
By now, it should be quite apparent that the value of a KrisFlyer mile is personal and different people have different valuations for it because of the way the type of flight they redeem.
Infrequent flyers (assuming negligible miles accumulated from flying) and/or low spenders (see How Much to Spend on Credit Cards for Free Flights) will find it extremely difficult to accumulate enough miles for Business Class redemptions (Minimum of 38,000 miles for Zone 2 redemption). Even if he or she were to make good use of Mileage Credit Cards with Signup Promotions and take full advantage of the 3 years validity of KrisFlyer miles to accumulate miles using the Best Mileage Credit Cards, it is likely that he or she will use the miles for a medium or long haul flight (Zone 4 and above) and not for a short haul Business Class flight (Zone 2 and 3) for a better holiday trip. This will result in an implied average valuation of 1.24 cents per mile (average Economy Class mile valuation) instead of 3.17 cents per mile (Business Class mile valuation) as seen from our table earlier.
Irregular flyers (assuming some miles accumulated from flying) and/or average spenders can accumulate a decent number of miles through diligent use of the right Mileage Credit Cards and utilising Mileage Credit Cards with Signup Promotions. They will be able to choose between redeeming Economy or Business Class tickets with the accumulated miles for their choice destinations (Preferably for Zone 4 and above). Obviously, he or she would be able to go on more overseas trips using miles redemptions if he or she were to redeem Economy Class tickets (implied average valuation of 1.24 cents per mile) as compared to Business Class tickets (3.17 cents per mile).
Frequent flyers and/or high spenders can afford to redeem Business or First Class tickets because they fly and/or spend enough to accumulate loads of miles to fly luxuriously. They will probably be able to get the best value for their miles (3.17 cents per mile for Business Class and 5.48 cents per mile for First Class) as compared to others. We can all complain about the unfairness of it but life is just not fair like that.
Sticking to the Base Scenario
Conservatively speaking for most of the average income earners and irregular flyers, it will be fair to assume a value of around 1.24 cents for a KrisFlyer mile as it is the average implied value of a mile if one were to redeem SIA Economy Class flights to all available destinations. SIA promotional prices and total number of miles required is used for the calcualtion.
Our valuation of 1.24 cents is likely to be higher in real life since it is normally quite difficult to get the cheapest promotional price for your chosen date and time to fly. Assuming that most travellers are only likely to compromise on the flight fares by paying at most 50% more than the cheapest promotional prices in return for their preferred date and time (the alternative is to look for a different destination or choose other carriers), the highest valuation we can give for a mile is still only 1.86 cents (1.24 * 150%).
Other assumptions for the base 1.24 cents valuation is that we only make Economy Class ticket redemptions and we are discounting the flexibility to make changes to redemption flights as making changes to a paid flight usually invovles some kind of penalty. However, we prefer to be conservative and err on the low side so that any upside is a bonus and hence we will stick to our base estimate of 1.24 cents (and a maximum value of 1.86 cents for those seeking an upper limit).
Other Valuations for Krisflyer mile
Well-known miles chasers also have different valuations for a KrisFlyer mile although they are somewhat similar among themselves but much higher than our valuation. MileLion value them at 1.80 cents, thePointsGuy value them at 1.75 cents (1.3 US cents) while PointsHacks value them at 1.60 cents (1.70 AUD cents). Their valuations are much higher due to the fact that it is based on their redemption preferences which often include Business or even First Class flight redemptions as well as taking advantage of redemption deals such as KrisFlyer Spontaneous Escapes.
SIA makes it easier for KrisFlyer members to utilise their miles through the "Pay with KrisFlyer miles" option which should appear whenever you are signed in and on SIA's payment page when making a flight booking. Using the option for SIA or SilkAir flights will result in a fixed implied value of 1.02 cents per mile (($522.2-$82.2) / 43,120 = $0.0102 in above example) while using the option for Scoot flight will result in a fixed implied value of 0.95 cent per mile. "Pay with KrisFlyer miles" for SIA flight should be your best alternative option if you have insufficient or expiring miles for a flight redemption. The valuation of 1.02 cents is only slightly lower than our valuation of 1.24 cents which kind of vindicates our conservative estimate for the value of a KrisFlyer mile.
Other ways to waste KrisFlyer miles include buying something from KrisShop at 0.80 cents per mile, converting KrisFlyer miles to Tap for More points for your Passion Card at 0.73 cents per mile or converting to KrisPay mile at 0.67 cents. We strongly discourage utilising the foolish methods to waste your hard-earned miles as it destroys value and defeats the purpose of accumulating miles.