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Airlines

Is it time to switch to Asia Miles?

So while Aaron has been busy sitting in the dark wearing goth kid clothing (Wong, 2017) (also taking the time to do some heavy number crunching so we lazy bums don’t have to), the rest of us have been thinking about where else we could spend our credit card miles now that our beloved national carrier has effectively become (even) more expensive to fly.

Other than KrisFlyer, many Singaporean credit cards allow you to credit miles to Asia Miles, which allows you  to redeem flights on Cathay Pacific (and its partners). So, how’s the scene look over at Hong Kong’s flagship carrier?

(Caveat: I’ve rather limited experience with Asia Miles myself, so would gladly welcome any corrections / additions from readers. Just add on to the comments if you’d like to leave any feedback!)

Marco? Polo!

First things first – some of you might have heard about the Marco Polo Club, Cathay Pacific’s loyalty programme. Then there’s Asia Miles, their rewards programme. What’s the difference?

It can be a little confusing, but Marco Polo Club status refers to a member’s elite level, akin to KrisFlyer Silver, Gold, etc… Asia Miles, however, refers to their rewards programme.

For those of us with zero status with Cathay Pacific, we can sign up for a plain Asia Miles account, which suffices for what we really want to do here – redeeming flight awards using credit card points.

Earning Asia Miles

Most major Singaporean banks (exception: OCBC) allow you to transfer points to Asia Miles. The full list of financial partners can be accessed here – the ones I recognise on first glance are American Express, ANZ, Citibank, DBS, HSBC, Maybank, Standard Chartered, UOB.

There’s also the option of chalking up miles by actually flying revenue (e.g. on CX or oneworld), but who’s actually got time for that?

Flying Cathay Pacific

Looking at Cathay Pacific’s route map, two things are immediately obvious.

First, it’s got a pretty well-developed network, covering Asia, Australia, Europe and America – all the places Singaporeans love to go.

Second, if you’re based in Singapore, you’ll probably need to get to Hong Kong before going on to your next stop.

That’s great if you want to do a stopover in Hong Kong, but not at all helpful if you want to go the opposite direction (i.e. Australia). Even if it’s on the way, the added hours from the stopover can still be painful.

Probably something to consider before booking!

The Experience

We don’t have trip reports on CX right now (something I’m hoping to remedy by the end of the year…) and so I’ll point to OMAAT’s reviews as a reference:

Unfortunately for us, a fair number of the SIN-HKG flights are currently still on older hardware and offering regional Business Class hardware. If you’d like to avoid that, you can try looking out for flights operating the new A350 – though for a 4h journey that might not really be your main priority.

Comparing numbers

The Asia Miles awards chart is organised by different zones (grouped by distance) from KrisFlyer’s, which makes it difficult to directly compare against the latter’s updated award chart. Instead, I chose a few cities from Skyscanner’s 2016 list of top year-end Singaporean destinations to see how Asia Miles fares against KrisFlyer.

(Also added New York to get a sensing for trips to America. Also, in case you want to see Trump Tower in person.)

I opted to compare the equivalent of business class saver return tickets, since I’m guessing that’s what the majority of (mile) price-conscious readers will be gunning for. Take note that for Asia Miles, a one-way award costs more than half of a return, so it’s actually cheaper to redeem a return ticket.

For the value of the new airport taxes / fees charged for KrisFlyer redemptions, I’ve used the value currently under “Airport/Government taxes” and excluded “Carrier surcharges”.

Addendum: In several instances it may make even more sense to redeem Asia Miles on partner airlines; this will probably be covered in a future post!

Bangkok (BKK)

Asia Miles KrisFlyer
Price 40,000 miles + 500 HKD (~S$92)
(755 HKD if via HKG)
40,000 miles + S$66.20
Shortest 1-way Journey Time 2h 15min
(7h 45min if via HKG)
 2h 25min

Verdict: Tie (CX for possible flexibility of including HKG stopover)

Bangkok’s the only other city CX flies to directly from Singapore – it’s pretty much a tie between the two (slightly cheaper for SQ). Flying CX does give you the option of throwing in a Hong Kong stopover for cheap (about 250 HKD) , though! (TBC)

Update: I’ve had conflicting reports on whether adding a HKG stopover will increase the number of miles spent – while a comment here suggest that it does, a post on HWZ suggest otherwise. Will check with Asia Miles and update.

Hong Kong (HKG)

Asia Miles KrisFlyer
Price 50,000 miles + 630 HKD (~S$115) 55,000 miles + S$93.60
Shortest 1-way Journey Time 3h 50min  3h 45min

Verdict: CX

Asia Miles starts getting cheaper – I value 5000 miles at around S$100, so the price difference is enough to hurt. Interestingly, you can also choose to fly via BKK (a stopover is possible too, though pricier) but if you want to cover both cities it seems to make more sense to redeem it as a SIN-BKK itinerary with HKG stopover instead. (TBC)

Tokyo (NRT)

Asia Miles KrisFlyer
Price 80,000 miles + 1,011 HKD (~S$185) 86,000 miles + S$66.60
Shortest 1-way Journey Time 9h 6h 35min

Verdict: Tie (SQ for shorter journey time, CX for HKG stopover/transit)

I was expecting CX to be the clear winner here given that Japan was one of the zones more adversely affected by the SQ devaluation. However, it seems that overall pricing is evenly matched, with the extra 6000 miles for SQ fairly evenly balanced out by the additional S$120 for CX (probably due to the transit in HKG).

If you want to check out the CX lounges in HKG it can be a fun detour, but I would personally opt for a direct flight instead.

Melbourne (MEL)

Asia Miles KrisFlyer
Price 80,000 miles + 1,832 HKD (~S$335) 116,000 miles + S$143.50
Shortest 1-way Journey Time 17h 15min 7h 25min

Verdict: SQ (though I suppose CX does cost less)

Once we leave Asia we start seeing the redemption cost for CX tickets clearly taking the lead (in getting cheaper) as compared to SQ.

That said, saving 36,000 miles (~S$720) might sound great, but I’d personally rather save 10h of my time. The geography just doesn’t work out, in this case.

Addendum: It should be possible to book a Qantas direct flight using Asia Miles, though I didn’t spot any availability in my initial research. 

London (LHR)

Asia Miles KrisFlyer
Price 115,000 miles + 3,077 HKD (~S$562)
(4,334 HKD on BA)
170,000 miles + S$367.80
Shortest 1-way Journey Time 16h 30min
(12h 50min on BA)
12h 55min

Verdict: CX

Even with higher taxes, the 55,000 mile (~S$1100) difference is humungous.

It’s also possible to book British Airways directly on the Asia Miles booking system. It seems the number of miles required is the same, though taxes might differ (more expensive, in this case).

Addendum: BA business class is not all that great, from what I’ve heard. In this case I think perhaps transitting in HKG is not the worst thing in the world?

New York (JFK)

Asia Miles KrisFlyer
Price 145,000 miles + 1,716 HKD (~S$314) 184,000 miles + S$193.60
Shortest 1-way Journey Time 21h 21h 35min

Verdict: CX

Since SQ doesn’t fly to New York directly, it loses whatever edge it had over CX (though for CX, it could sometimes be noticeably  longer). The 39,000 mile difference (~S$780) fails to make up for the difference in taxes, though the overall gap is not as stark as the SIN-LHR itinerary.

Conclusion

This evaluation was done with a rather small data set, and I’ve made a few assumptions regarding the cash values that KF will be charging post-devaluation, but overall I suspect that  the figures should be indicative enough, even if not 100% accurate.

This was an interesting exercise for me – I’d started with the expectation that Asia Miles would be the clear winner, but it turns out that post-devaluation KrisFlyer still seems pretty comparable, as far as business class flights to Asia go.

For long-haul flights, Asia Miles does emerge as the clear winner, though you’d probably want to consider total journey time to see if a redemption makes sense. Ultimately, as our national carrier, SQ still offers more direct flights ex-SIN than other airlines, so that’s something else to consider in choosing which programme to use for your redemptions.


Louis believes he caught the premium travel bug after attaining KrisFlyer Elite Gold and occasionally being upgraded while shuttling between the UK, Singapore and Japan (in economy class). These travels have led to a wonderful marriage, as well as a burning desire to maximise his frequency of travel in business class or better.

He travels with a gryphon plush toy, Griffles, which often stands in for him in vacation photos. Griffles continues to amuse (and confuse) air stewardesses, hotel staff and just about everybody else, all around the world.

cover photo via Instagram by airplanesloverr

More implications of the Krisflyer devaluation

Ecclesiastes 1:2-3

“Meaningless! Meaningless!” says the Teacher. “Utterly meaningless! Everything is meaningless”. What do people gain from all their labors  at which they toil under the sun?

You’d forgive many a Krisflyer member for feeling like Solomon on a Thursday morning as we take stock of the sudden Krisflyer carnage visited upon us last night.

Here’s a link to my initial take on the changes. After sleeping it over I’ve thought of some additional pointers raised by this devaluation. There will no doubt be more analysis in the days to come.

You should chase your waitlist to clear

I’m intrigued to see what SQ’s revenue management team will be doing in the 3 weeks we have before the devaluation takes place. We all know that the Krisflyer waitlist is cleared manually. But does the revenue management team

(A) Clear as many awards as possible between now and 23 March so as to maximise the money SQ collects from fuel surcharges or

(B) Deliberately hold up clearing the waitlist till 23 March so as to maximise the miles SQ clears off its balance sheet

It’s certainly an interesting thought exercise and I’m sure SQ management must have considered this already. The “fair” approach to take would be for SQ revenue management to follow exactly the same heuristics as they do now when clearing waitlists, but there’s nothing obliging them to do it.

Remember: it doesn’t matter when you waitlisted your award booking. All that matters is when it is ticketed. If you ticket before 23 March, you enjoy the old rates. If you ticket on 23 March or later, you pay the new rates (but no fuel surcharges).

I’ve established in my first article that the savings on fuel surcharges do not offset the higher mile requirements, so I’d recommend you pick up the phone and start chasing SQ.

SQ’s new cabin products will cost you more

Image result for singapore airlines suites
soon to be replaced

Part of me wonders whether the timing of this devaluation has anything to do with the fact that SQ is intending to launch new cabin products for its A380 aircraft some time this year.

If so, this would suggest that SQ will not prevent KF members from redeeming its new cabin products at saver rates, a tactic it has used before when unveiling the 2006 new First and Business Class seats and the 2007 Suites product.

Of course there’s nothing stopping you from locking in award tickets at the current rates for 2018 now and hoping your aircraft gets switched to a new one, which brings me to my next point…

Your existing awards are protected even if your dates change

In theory, any ticket you redeem now will be protected against the future price increase so long as whatever changes you make do not require a reissuance of a ticket. 

Date changes do not trigger a reissuance. So if I lock in a round trip first class ticket to SFO today at 182,750 miles and subsequently change my dates in August, I will not be required to pay anything new.

That’s the theory at least. Whether front line SQ phone agents will be bright enough to see this logic remains to be seen, and I fully anticipate we’ll see more than a few complaints about this. If the agents refuse to honor the old rates, ask to speak to a supervisor. Let’s see how this goes.

You should now be channel agnostic when buying SQ tickets

Airlines do not discriminate among channels when awarding miles for air tickets. A Y fare class bought from Expedia enjoys the same accrual rates as a Y fare class bought from Priceline as a Y fare class bought directly from Singaporeair.com.

However, if you want to upgrade your full fare economy/premium economy/business class ticket to the next highest fare class using miles, you’d traditionally need to buy direct from SQ in order to enjoy the 15% miles discount.

I learned this the hard way after buying a premium economy ticket from SIN-FRA via Expedia in order to take advantage of the UOB PRVI 6mpd promotion.

I went online to try and upgrade my ticket to business class, but found that SQ was unwilling to offer the 15% online redemption upgrade discount because I’d bought the ticket through a 3rd party.

The additional 15% I had to spend ended up offsetting the additional 2mpd I earned through paying with my UOB PRVI Miles AMEX as opposed to my HSBC Advance.

UOB PRVI 6mpd promotion

With the removal of the 15% discount, however, there’s really no incentive to buy your tickets directly from SQ. This might be one of the unintended consequences of the Krisflyer devaluation (although Krisflyer might very well make a new rule that only tickets bought directly from SQ can be upgraded using miles. We shall see)

There are some loopholes in the Star Alliance award chart

I pointed out in my first article on the devaluation that it was now cheaper to redeem Star Alliance first class. It seems I’m not the only one who has noticed this, as the US blogs have picked it up. Their examples are US centric, so let’s take this from a Singapore point of view.

click to enlarge- the % in the last 6 columns refer to the premium you are paying to redeem via *A as opposed to via SQ

Suppose I wanted to fly to a destination in the US that’s unserved by SQ. Think Miami, Seattle, Portland, Washington DC, Las Vegas, Boston etc. All awesome cities, but not served by SQ.

If I wanted to use Krisflyer miles what I’d traditionally do is book an award ticket to the closest SQ-served destination and buy a cheap economy ticket for the rest of the way. This is because the additional Krisflyer miles I’d need to spend to redeem a Star Alliance award would more than offset whatever savings I’d have by not having to buy a separate revenue ticket.

In other words, a one way itinerary like SIN-HKG-SFO-PDX in First Class would price (before the devaluation) at

  • 112,500 miles with *A
  • 91,375 miles with Krisflyer (and I need to buy an additional ticket to get from SFO-PDX)

After the devaluation

  • 112,500 miles with *A
  • 118,000 miles with Krisflyer (and I need to buy an additional ticket to get from SFO-PDX)

What I’d do in this case is call up Krisflyer membership services and ask to book a Star Alliance award from SIN-PDX in First. Assuming award space is available, they’ll give me SIN-HKG-SFO in First and a connection on UA from SFO-PDX, also in First. So it costs me less to get to where I need to go!

This is certainly an interesting opportunity for any Krisflyer member who wants to explore more of the US and it remains to be seen how long this loophole will exist.

Your valuation of a mile needs to change

Let’s talk theoretical value as opposed to actual value, because, as I mentioned in my iPayMy webinar presentation on airlines, actual value is the product of some complex considerations including how much you value certainty, how available saver space is, how much you would really have been willing to pay for a ticket etc.

sample revenue prices and miles prices for selected destinations. click to enlarge

The theoretical value of a mile  has traditionally been 1-2 cents for economy, 4-5 for business and 7-8 for first.

With the devaluation, it comes down ever so slightly.  1-2 cents is still the threshold for economy class (in the example above I’ve used SQ’s lowest possible economy fares, which strictly speaking will not be a fair comparison because award tickets can be changed or refunded with minimal to no charges, whereas these cheap economy fares will not be), 3-4.5 cents for business and 4.5-7.5 for first.

Keep in mind that I’ve also not considered airport taxes on award tickets as part of the equation because they should be minimal, but that will bring down the valuation ever so slightly.

Conclusion

I’m sure this is only the tip of the iceberg. I know a lot of people are asking about Asia Miles now and whether they should transfer their DBS/UOB points there instead of to Krisflyer. I promise you we’re looking at that and will publish something shortly.

Guestwriters, help.

SQ has devalued its Krisflyer award chart. Here’s what you need to know

(EDIT: In addition to this article you might want to check out some additional thoughts on the devaluation I published here)

Wow. Back when I wrote about the Krisflyer devaluation that took place in May of 2016 I confidently said the program was safe for at least another year, since no one would devalue a program twice in quick succession (To be fair, the May 2016 devaluation wasn’t really much of a devaluation; award prices largely remained the same (with the exception of the consolidating Europe into one zone))

Shows what I know. Here’s SQ’s 70th anniversary present to you, a surprise email announcing a devaluation effective 23 March 2017. The old award chart is here. The new award chart is here. To summarize-

The Good

  • SQ has removed its much maligned fuel surcharges from award redemptions. I nearly fell off my seat when I read this, because the cynic in me has always seen that as an easy money maker for SQ.

The Bad

  • Award prices are going up across the board (we’ll look at how much in the detailed analysis) and there is no longer any 15% discount for online redemptions

Detailed Analysis

What you need to realise is that this devaluation changes everything.

That sounds dramatic, but the fact is that the underlying math has changed, and now we need to reconsider a lot of the conclusions I’ve come to in other articles on this site. They’ll be updated gradually, but let’s do some analysis here first.

How much have award prices increased?

Standard awards, saver/standard upgrade awards and premium economy saver awards have not been touched in one sense, but in another they now all cost 15% more because of the removal of the online redemption discount. 

I’ve put together the new and old saver redemption rates for comparison-

click to enlarge

Observations-

  • Surprisingly, the awards that have gone up the most (in % terms) are Economy Savers to Japan/South Korea and Australia (ex Perth and Darwin) + NZ. These awards go up by ~30%.
  • But premium cabin awards to medium and long haul destinations have also been hit hard. Business and First Class to Japan/South Korea/Australia (ex Perth and Darwin)/ New Zealand/ Europe and the USA have all gone up by 25-30%
  • Short haul and China routes see the smallest increases- Business and First Class to South East Asia and China have gone up by 18%

A 30% increase is certainly not to be sniffed at, and it’s going to hurt those people who have been trying to save up for an award only to see the goalposts moved 30% further.

Why would SQ remove the online redemption discount? I’m sure the original reason for introducing it was because it costs less (in terms of customer service time and overheads) to issue an online award ticket than one issued over the phone. However, SQ’s crappy website meant that people had to call in to book the following types of awards

  • Upgrades that required waitlisting
  • Upgrading one leg after the first leg had been flown
  • Mixed cabin awards

In practice these would all receive 15% redemption discounts too because they couldn’t be done online. So perhaps SQ felt it was time to face that reality and simply stop discounting. Or perhaps the creation of a channel through which 15% discounts could be obtained created the idea in peoples’ minds that they should never be paying full price, even when they used the call centre for an award that could be easily ticketed online. It was probably easier for SQ to eliminate this altogether than have to deal with (admittedly unreasonable) customers like this.

That said, it would be unfair to straight away conclude that all Krisflyer award tickets are now “worse value” because we need to first consider the carrot that SQ has thrown us…

What are the implications of removing fuel surcharges?

Image result for Airplane refuelling

This has the potential to be a silver lining. I’ve said it before and I’ll say it again that fuel surcharges are the junkiest of all charges. They make absolutely no sense. It’s like a restaurant charging you separately for ingredients and saying your base price only includes the cooking.

I applaud SQ for removing fuel surcharges (the conspiracy theorist in me is now wondering if Singapore is going to introduce legislation ala HK, the Philippines and Brazil that outlaws fuel surcharges in the next few months…) because that’s the right thing to do.

The question then is- does the absence of fuel surcharges make up for higher redemption rates?

I’ve pulled out a few award bookings I made in the past few months to check the YQ (Fuel surcharge) component. Here’s what I found (fuel surcharges in SGD)

It seems that on long haul flights (SYD, JFK, IAH), the savings in terms of fuel surcharges do not offset the additional miles you need to pay. 

Take SIN-SYD for example. I now need to pay 16,250 more miles, for which i save S$195.30 in fuel surcharges. This values one of my miles at 1.2 cents, which is way below the 2 cent threshold. Same goes for JFK and IAH.

It’s interesting to note that for my Bali and Bangkok redemptions, I do get a bit more in the way of value per mile. I wouldn’t call this enough to make the increase less painful however, given that I don’t advise people to redeem miles for short haul routes.

Long story short- no. Fuel surcharges are annoying, but you don’t come out on top with their removal because the number of miles needed has increased.

Are premium economy redemptions now worth it?

IMG_20160123_144830

When SQ made premium economy saver redemptions available in May 2016, I said that they weren’t worth it because they cost ~80% the price of a business class award. Given the huge gap in comfort and the small gap in miles, I advised people to save up just a bit more.

Here’s what the ratio between premium economy and business saver awards is before and after the devaluation.

As you can see, it’s still not a good deal. Premium Economy awards still require 75-85% the miles of a Business award. I’d stay clear of these.

Are Star Alliance awards better value now?

Star Alliance awards were not touched by this devaluation, and they never had a 15% discount for online redemptions, thereby leaving the effective price the same.

I wrote an article not too long ago comparing the cost of Star Alliance awards to Krisflyer awards. That obviously needs to be reworked, and the revised working is very interesting

click to enlarge. The % in the last 6 columns refer to the premium (in miles) that you are paying for redeeming via *A as opposed as to via SQ

It is now cheaper to redeem Star Alliance partner awards than Krisflyer awards for certain locations.  Ignoring fuel surcharges for a moment (some partner airlines will charge them, others will not)

  • Singapore to North America in F: 112,500 miles with *A vs 118-120,000 with SQ
  • Singapore to Europe in F: 107,500 miles with *A vs 115,000 with SQ
  • Singapore to Europe in J: 80,000 miles with *A vs 85,000 with SQ
  • Singapore to Australia in F: 75,000 miles with *A vs 80,000 with SQ
  • Singapore to Australia in J: 55,000 miles with *A vs 58,000 with SQ
  • Singapore to Japan/S Korea in F: 60,000 miles with *A vs 65,000 with SQ
  • Singapore to Japan/S Korea in J: 40,000 miles with *A vs 43,000 with SQ

That’s a really, really interesting dynamic change, because I always assumed SQ was actively trying to encourage people to redeem awards on SQ metal rather than *A metal (to avoid having to pay *A partners a reimbursement fee). And now that SQ doesn’t even collect fuel surcharges on award tickets, does the elimination of more miles from their balance sheet outweigh the potential higher volume of cash outflow to *A partners for award redemptions?

More thoughts on this later. In the meantime I’d strongly consider you to think about a Star Alliance award if you cannot find saver space with SQ. It’ll be a good time to try some different products. 

Conclusion

I’ve always felt SQ’s award chart was much “better” compared to those of competitors because award costs were much lower. That evidently needs a rethink. SQ rightly pointed out that the last devaluation took place in 2012 and to their credit they didn’t try to spin this as an enhancement, but it does seem a bit on the nose to do this in the year they’re celebrating their 70th anniversary.

I will have a lot more to write about this in the days and weeks to come, I’m sure. How does this affect the valuation of a mile? Should you start looking at alternative programs like Asia Miles?

If you have an existing award ticket, my advice to you would be to hold on to it, because I don’t think when you factor in the additional miles required you don’t come out on top by saving fuel surcharges.

Breathe people. Breathe.