cover photo by patrickdelrosario

The Idea

• SQ charges fuel surcharges (YQ) on award tickets which can result in a “free” ticket still burning a hole in your pocket
• However, YQ varies depending on your point of origin. It is typically the highest for flights originating out of SIN. To reduce the amount of YQ you have to pay, you can try
  • Finding a cheap one-way ticket to a stopover location and continuing your journey from there (eg HKG-SFO, ICN-SFO, FRA-JFK, NRT-LAX)
  • Finding a cheap one-way ticket to Manila and routing from there (flights from MNL have no YQ)
• Of these 2 options, the first is probably easier as it does not involve back-tracking. However, it is only possible on non-direct flights.For direct flights, you should weigh up the cost savings versus extra time involved

The Details

SQ’s award ticket policy is a bit of a bitch. You’d think that after flying thousands of miles and generating lots of ancillary fees for them by using a miles-earning card that they’d at least let you enjoy the fruits of your labour. Hardly so. Even if you do manage to get increasingly scarce saver award availability, SQ further levies fuel surcharges (known as YQ) and taxes on your redemptions.

This is not unique to SQ. Many Asian and European airlines (but surprisingly not penny-pinching US ones) levy YQ on award redemptions, arguing that your miles are only paying for the fare component and that fuel is payable separately.

This, of course, is a load of bs. You wouldn’t go to a restaurant and expect to have to pay separately for the gas used to cook your food. Why should airlines have it different?

Furthermore, SQ’s YQ has always been higher than the market’s. Oil prices have been declining for a while now, but SQ only recently announced its decision to cut YQ, and even that cut was much less than the % by which oil prices have fallen. Rumour has it that SQ has a lot of badly-made fuel hedges which have locked it into relatively high jetfuel prices.

Whatever the case, fuel surcharges are a fact of SQ redemptions. So what can we do about them? Is there a way to reduce the amount we have to pay? The solution is to not start your journey from Singapore. Let me show you 2 options below

Option 1: Start your journey from the stopover

The first method is only applicable on long-haul routes involving a stopover. Typically this means SQ’s North and South American routes, because most European destinations are non-stop.

Let’s say I wanted to go from SIN-SFO. I have 2 options. The first is to route from SIN all the way to SFO, which would cost me 68,000 miles plus S$385 of taxes and surcharges.

The second is to only route from HKG-SFO, which would cost 63,750 miles + HKD650 (S$110) in taxes and surcharges.

If you do this, you’d need to get from SIN-HKG, obviously. A budget airline ticket would set you back about S$110

Remember that we value miles between ~S$0.04-0.05 each. This means the total saving is 4,250 miles (valued between S$170-S$210) plus S$275 in surcharges. Minus away the cost of the SIN-HKG positioning ticket and your savings are ~S$350. That’s quite a bit!

Just remember you need to factor in the cost of your baggage which will be chargeable on a budget airline.

Option 2: Start your journey from Manila

The Philippines recently passed legislation which banned airlines from charging YQ on top of tickets. This isn’t going to affect SQ’s revenue operations from Manila- they’ll just bump up the base fare to cover whatever the YQ would have been. But for their award tickets, this opens up a very interesting opportunity.

Look what happens when I price the same ticket from MNL to SFO, via SIN and HKG

The number of miles required is still the same, because Manila is in the same zone as Singapore. However, look at the taxes and surcharges- they’ve dropped to US$56.65, or ~S$75, because there’s no YQ for flights originating from MNL. So despite the fact we’re flying 1 more leg on SQ, the cash outlay of our redemption has dropped by S$310!

The question you then need to ask yourself is this- is it worth my time to take a budget flight to Manila and start my trip from there?

Kayak shows that the fares for a one way ticket from SIN-MNL start at ~S$120.  This means your net saving is S$310-120=190. (You’ll also need to take into account luggage charges levied by budget airlines)

Once you factor in the additional time you will need to schedule to make your connection, the overall appeal of starting your trip from Manila may diminish. However, keep in mind that our analysis is based on SQ’s current reduced YQ. 6 months ago the difference in taxes and surcharges between an award ticket starting in SIN and one in MNL would have been upwards of S$500.

Conclusion

Neither method is perfect. Option 1 is easier to do, but isn’t an option on flights without a stopover. Option 2 can be done for any flight, but requires flying SIN-MNL-SIN-wherever. Once you factor in flight time to MNL plus the buffer you need to give yourself for transit, the cost savings may not be significant enough to sway your decision.

Ultimately what will drive your decision is what SQ does with its YQ in the future. If oil prices rebound and SQ raises its YQ again, your time-money tradeoff may shift more favorably in the direction of one of the methods above.

The presence of fuel surcharges on SQ award tickets is another reason why you should take a look at Lifemiles, which doesn’t have any of this nonsense going on. Why not create an account with them today so you can take advantage of their highly lucrative mile-buying promotions?