Airlines

The Krisflyer devaluation is here

Ok. No time to keep feeling sorry for myself, because bigger and more important things are now happening. I’d like to claim some special powers of clairvoyance but really, everyone knew this was a long time coming.

SQ has announced changes to its award chart that take place from 24th May 2016. The revised award chart can be found here.

Here is the TL; DR summary

The Good

  • Premium Economy saver award seats can now be redeemed. They’re not cheap though, at ~80% the cost of a business saver award
  • The “full” award level has been removed, and anyone holding a “full” award ticket will be rebooked into a standard award and have the miles difference refunded to them. I have yet to meet anyone who has ever booked a full award

The Bad

  • Europe has been combined from 2 award zones into 1. Naturally the higher of the 2 rates has been used, meaning that award prices to Amsterdam, Athens, Copenhagen and Rome will increase
  • You can no longer upgrade to business class from a full fare economy ticket on flights with a premium economy cabin. Only upgrades from premium economy to business will be permitted (from 1 Jun).

Detailed Analysis

PPS Club / KrisFlyerPPS Club / KrisFlyerkfdeval

Guys I totally called it that SQ would market this as an overall improvement because they’re now allowing PY redemptions (yes I know everyone called it as well)

But overall the changes were nowhere as bad as I expected. Don’t get me wrong, it still counts as a devaluation, but with the exception of Amsterdam, Athens, Copenhagen and Rome all other destinations retained their current redemption rates.

Let’s look at this in detail-

Allowing Premium Economy Redemptions

The move to allow premium economy redemptions in and of itself is welcome (the real problem is SQ maintaining its 1 cabin upgrade policy as we’ll touch on in a bit), but the rates are very steep

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As you can see from this table, the cost of redeeming a premium economy saver is approximately 80% the cost of a business saver across the board

Zone (One way redemption rates for saver) Premium Y Business Ratio
4: South China, HK & Taiwan 22.5 27.5 82%
5: North China (BJ & SH) 30 35 86%
6: South Asia (India, Sri Lanka Maldives & Bangladesh) 30 35 86%
7: Japan & South Korea 32.5 40 81%
9: Australia (ex Perth & Darwin) & NZ 45 55 82%
10: Africa, ME and Turkey 35 45 78%
11: Europe 62.5 80 78%
12: USA (West Coast) 65 80 81%
13: USA (East Coast) 70 85 82%
14: South America (Sao Paulo) 72.5 87.5 83%

So redemption rates for premium economy are closer to business class than economy. Which means that there’s really not much reason to redeem outright for premium economy instead of business, given the small gap in miles and big gap in comfort.

Removing the Full award level

IMG_20150801_002000
flying this baby to Paris would have once upon a time cost 850,000 miles round trip…

Old unfunny joke on forums goes “they call it full award because only a fool would pay those prices”. But it’s true, you know. I have never understood what the purpose of the full award was, given that it costs  an astonishing 315,000 miles to fly one-way to San Francisco in business class.

Random thought: does the removal of the full award level create an opportunity to get an award ticket on certain routes where there is no standard or saver awards available?

Everyone who has a confirmed full award ticket as of 24th May will have that changed to a standard ticket and the miles refunded, so if you’re looking at the infamous SQ25/26 route and there is only full award space available, this might be a way for you to nab a standard award (assuming you have enough KF miles to confirm a full award in the first place!)

One Europe Zone

SQ used to have 2 Europe redemption zones which have now been combined into 1. As you can see, the revised Europe zone uses the higher of the 2 rates

Europe 1 (Athens, Amsterdam, Copenhagen, Rome) Europe 2 (All else) Revised Europe
Economy 35,000 35,000 35,000
Premium Economy N/A N/A 62,500
Business 60,000 80,000 80,000
First 85,000 107,500 107,500

The revised European classification means it makes all the more sense to explore using Star Alliance partners to get to cities in Europe not served by SQ. You can read more about that here, suffice to say that the additional 12,000 miles involved in flying with a Star partner may be offset by the need not to buy a connecting ticket or worry about interline baggage issues.

I wonder if this has anything to do with SQ introducing the A350 to Amsterdam. SQ is generally loathe to allow cheap redemptions for their newest aircraft, as we saw from them not allowing saver award redemptions on their 2006 cabin products when they first launched for a few years.

No more upgrading from economy to business

not for you anymore if you don’t have a PY ticket…

The revised chart means that whenever a flight offers all 4 cabins (including PY), you cannot upgrade from economy to business class directly. You can only upgrade from economy to premium economy, and premium economy to business.

Let’s first see how the premium economy to business upgrade rates compare to the old economy to business upgrade rate. For the sake of space (and because I am pathologically lazy) I am only going to look at long haul routes where this kind of upgrade would make sense

Zone Upgrade Y to J Upgrade PY to J Difference
9: Australia (ex Perth & Darwin) & NZ 45 30 -15
10: Africa, Middle East and Turkey 35 25 -10
11: Europe 65 45 -20
12: USA (West Coast) 65 45 -20
13: USA (East Coast) 67.5 47 -20.5
14: South America (Sao Paulo) 69.5 50 -19.5

Turkey looks like a potential sweet spot for upgrading from PY to J, with a 15% discount you’d spend 21,250 miles only.  But the bigger savings are to be found in Zones 11-14, where the miles required for an upgrade are reduced by ~20,000.

Sadly the flip side of this is that you cannot upgrade from a full fare Y ticket to a business class seat anymore on the routes that you’ll really need it. Meaning that if your company has an economy-only policy, you’re really going to feel this change.

That is, unless you’re willing to pay the miles to upgrade from economy to premium economy…

Zone Upgrade Y to PY
Zone 4: South China, Hong Kong & Taiwan 9
Zone 5: North China (Beijing & Shanghai) 14
Zone 6: South Asia (India, Sri Lanka, Maldives & Bangladesh) 14
Zone 7: Japan & South Korea 15
Zone 9:  Australia (ex Perth & Darwin) & NZ 22.5
Zone 10: Africa, ME and Turkey 18
Zone 11: Europe 32.5
Zone 12: USA (West Coast) 32.5
Zone 13: USA (East Coast) 34
Zone 14: South America (Sao Paulo) 35

Now unless your company is already paying I struggle to see why anyone would pay for full fare economy only to add on more miles for an otherwise marginal comfort upgrade. Because anyone who is travelling on their own dime would surely either (1) buy the cheapest non-upgradable economy fare there is or (2) outright buy a premium economy ticket.

I also do not understand why SQ doesn’t simply have 2 types of upgrades: from PY to J and Y to J, where you charge a bit of a premium. Other airlines can do that so why not SQ?

Some part of me think this all goes back to SQ’s “cabin protection” policy where they do not upgrade as far as possible to maintain the exclusivity of the premium cabins. It’s a silly policy but what are you going to do?

Conclusion

In the words of a wise and learned sage, “are we out of the woods?” For now, yes. I don’t think even SQ would have the cojones to do 2 devaluations in quick succession. So I’m going to go out on a limb and say the next 12-18 months the award chart will be stable. This is good news if you’re still saving up for a dream suites/first/business redemption.

So all in all, this is a devaluation but we should all be thankful because it could have been much , much worse.

photo credit: georgelau

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43 Comments on "The Krisflyer devaluation is here"

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Wa.. your prediction come true man, that SQ miles will devaluate! But the good news is not that worse as it seems. Okay, seems like my NZ trip on biz class with miles is still on track! Thanks for the update! You can sleep well tonight!

Wow… I am confuse… I plan to go to London with the wife in two years time… What is the best way to fly there on business class? Plan to upgrade from miles…

Oh no! Was waiting for the booking window to open for Rome – 14 May 17.. Seems like I’ll have to seek other alternatives cause not enough miles already..

Hi, so does that mean that to upgrade from economy to business class, we need to upgrade to premium first, then from premium upgrade again to business

Does this mean if I want to book a business flight to Rome it will cost 272000 miles instead of 204000 miles after 25 May?

Like you said, it could have been much much worse.. @Luke you are just going to miss the window by 1 day! that’s gotta be really bad luck. No way to shift your travel forward by a day? I think the relatively high cost of PY award may be because SQ is hoping that after the J awards are snapped up (which usually happens pretty quickly), those who missed the opportunity would instead spend the miles on PY awards.. Removal of full awards does disadvantage the small group of people who have a gazillion miles and do use full awards… Read more »

@Jeriel yea that’s really some tough luck. no chance since that’s our wedding day. Guess we might just have to settle for Economy then.

Hi thanks for the analysis. I was expecting a devaluation when SQ introduced premium economy. I’m glad that I have burnt and used my miles before the devaluation.

Hi Aaron… I have quickly redeemed a flight to Italy next year. Thanks for your Super fast update or I would have missed this devaluation news. lol

I look forward to your next article on the best pastas from Italy. Lol

Ok it’s really not as bad as I thought…. My main concern would be a full devaluation across the board which didn’t happen

While a devaluation, I definitely bought your assessment that KrisFlyer had some risk around the program until they released a new award chart with Premium Economy included. As a result I reckon this is a massive win (not to have most of the key award prices touched). Kudos, for now, to SQ for maintaining such a stable program.

[…] MileLion notes that Premium Economy pricing is set closer to Business Class than Economy, so a Business Class redemption is still going to be a better deal for your points if you can earn a few more points and find availability. […]

Hi Aaron, great analysis and frankness. I always enjoy reading your updates. As a SQ solitaire member for the last 30 years, I feel that SQ does not value loyalty but only money. When I was very close to qualify for life membership, they cancelled that category citing overcrowding of lounges. Give me a break….. They should be happy with more loyal members!!! SQ expects its members to fly business class till their last breath and the very day they retire and flies economy, their PPS membership is revoked, doesn’t matter if he is a Solitaire member for over 30… Read more »

[…] MileLion notes that Premium Economy pricing is set closer to Business Class than Economy, so a Business Class redemption is still going to be a better deal for your points if you can earn a few more points and find availability. […]

I suppose its quite sad really that our expectations are so low that we’re celebrating SQ only mildly devaluing KrisFlyer.
I wonder what we, as enthusiasts, can do to turn this situation around?

Switching to Cathay will always require transit in Hk

I think they reduce the seat availability on economy. I want to redeem economy seat from MNL to GRU for end october, Last week there are still many seat available but now start from end october to next year, i only see standard and no saver available.

I must be foolish but for the first time ever, I have redeemed a Full Business ticket from London to Singapore as nothing was available on Saver and Standard for my dates. Now I just have to wait for SQ to change the ticket to Standard and refund me the miles.

Does anyone know if I upgrade my ticket now (before 1 Jun) for travel in Dec’16, am I allowed to upgrade to business or just premium economy?

You can only upgrade to the next class. So if your flight has premium economy, you will it be able on upgrade to business.

*not be able to upgrade to business.

[…] Airlines, and Alaska Airlines. Think this only happens to US-based airlines? Our favourite Singapore Airlines just announced a slight devaluation this week […]

[…] Airlines, and Alaska Airlines. Think this only happens to US-based airlines? Our favourite Singapore Airlines just announced a slight devaluation this week […]

[…] Airlines, and Alaska Airlines. Think this only happens to US-based airlines? Our favourite Singapore Airlines just announced a slight devaluation this week […]

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