Singapore Airlines adds new fare types, seat selection fees

I attended a couple of media relations classes in uni, and I remember one trick of the trade they taught us was to always break bad news on a Friday, because it tends to get lost in the media cycle and the markets forget it by Monday.

It seems that SQ’s PR team attended the same class, because today saw the release of a torrent of changes to SQ’s revenue ticket classes and changes to Krisflyer fees as well. It’s not all bad, but on the balance I think the changes veer more negative than positive.

This is a long article, so here’s the tl;dr version

• Seat selection for certain economy class tickets will now incur a charge
• More buckets of economy class tickets will now be eligible for upgrades to the next cabin
• Certain premium economy and business class tickets will no longer be eligible for upgrades
• Award ticket change/cancellation/refund fees have increased significantly

SQ is introducing new fare types and monetizing seat selection in economy

The story leads with SQ’s introduction of new fare types throughout all its revenue ticket classes. With these changes to revenue tickets comes corresponding changes to award tickets as well. SQ has changed the name of Standard Awards to “Advantage” Awards, and as you’ll see below there are differences in their onboard benefits as well as cancellation/change/refund fees.

These new fare classes will take place from 20 January 2018, and I’ve outlined each of them below.

Economy Class

Revenue Tickets
Here’s the summary of the 3 new fare classes and their respective offerings.

The good news is that SQ is revising upwards the minimum number of miles you earn on any economy fare to 50% (I still remember the time when SQ didn’t award any miles at all on discounted economy fares).

Currently, we have Economy (K/V) -10% accrual and Economy (N/Q)- 50% accrual. Now we have Economy Lite (Q/N/V/K) earning 50% miles. This is however a step down if you booked Economy Flexi Saver which used to earn 100% miles. The new Economy Standard (M/H/W) earns 75% miles. Economy Flexi (Y/B/E) is unchanged at 100% accrual.

This change is good if you’re a leisure traveler because discounted economy tickets now earn more miles. If you’re a business traveler whose corporate policy required flexibility but felt Economy Flexi was too expensive, you lose out slightly as you go from 100% miles to 75%.

The other thing that jumps out at me is the need to pay for seat selection. It’s very clear that at least some part of this decision by SQ was driven by the need to compete with budget airlines and full service ones that are unbundling their offerings in economy. Seat selection is an easy win for monetization.

Economy Lite needs to pay for seat selection (except when traveling with a child or infant). Economy Standard can select standard seats for free, and Economy Flexi gets standard and forward zone seats. What are forward zone seats? Here’s how SQ explains them:

And here’s how they appear on a seatmap. This looks to me to be an A380 layout.

Lite and Standard fares do not have access to the forward zone. If you purchase such a fare it will cost you to buy a seat in one of these zones. Seats can be chosen for free at the 48 hour mark regardless of ticket type during online check-in.

If you hold elite status, you may want to note that KrisFlyer Elite Silver members may select Standard Seats in advance for free, KrisFlyer Elite Gold members may select Standard and Forward Zone Seats for free.All PPS Club members enjoy complimentary advance seat selection (Standard, Forward Zone and Extra Legroom) in Premium Economy and Economy Class.

It is disappointing to me that a carrier which takes great pains to brand itself as premium would start nickel and diming economy passengers for seat selection, but that unfortunately is the way things are heading now. SQ will of course position this as “giving our highest fare paying customers preferred treatment” and point out that “we don’t expect to earn much revenue from seat selection as it’s a nominal fee”, the same line they trotted out when they started charging money for exit row seats. Make no mistake, though, this marks a strategic change in the way SQ thinks, and it makes me wonder what other changes we’ll see in economy over the next 1-3 years.

Award Tickets

Advantage award tickets have slightly more check-in allowance than Saver tickets plus complimentary access to Forward Zone seats.

Premium Economy

Revenue Tickets
Premium Economy tickets now come in two flavors- Standard and Flexi.

The two big changes to me here are mileage accrual and upgrades.

Premium Economy tickets currently earn 110% miles regardless of whether they’re P, S or T fares. The new PY Standard tickets (P) earn 100% miles and PY Flexi will earn 125% (S,T)

Under the old system, any Premium Economy fare (P, S and T) could be upgraded to Business Class. With the revised system, only S and T fares (Premium Economy Flexi) can be upgraded. This is a shame, because for the amount you pay for SQ’s premium economy (even the P fares can be very expensive) you wouldn’t think they’d restrict an upgrade to this extent.

Award Tickets

There are currently only Premium Economy Saver awards, and this remains unchanged.

Business Class

Revenue Tickets
Business class tickets now come in Lite, Standard and Flexi varieties.

All business class fare buckets (J/C/D/Z/U) used to earn 125% miles, but with the new system D/U earns 125% and Z/C/J earns 150%.

The biggest change for me is the addition of Business Lite. I’ll be very interested to see how this bucket prices out, and whether it’ll bring SQ’s premium cabin fares more in line with its competitors (ha ha ha). Business Lite fares seem very restricted- no-shows mean you lose your ticket, and cancellations are not allowed. They also cannot be upgraded to First Class. This almost seems like the LCC of business class fares, and I do wonder whether businesses which require flexibility in travel plans will be willing to buy these fares, or whether they’re an attempt to get affluent people to buy up to business.

Award Tickets

No substantive changes here to note in terms of onboard benefits- however do note that there are different change and cancellation fees for Saver vs Advantage tickets (see below)

First/Suites

Revenue Tickets
The main change here is that mileage accrual goes from 150% to 200%.

Award Tickets
No change here, but remember that saver and advantage tickets have different change and cancellation conditions (see below)

Economy Standard and Flexi Tickets can now be upgraded

I’ve often lamented the fact that SQ’s upgrade awards are almost useless because they require you to buy the highest fare of economy available, which in many cases can approach the cost of a discounted business class ticket on other airlines.

SQ is now allowing passengers who buy Economy Standard and Economy Flexi tickets to upgrade to the next highest cabin (premium economy where it’s available, otherwise business class). Here’s the revised upgrade chart.

In the table below I’ve pulled together a comparison of how the miles required to upgrade to the next cabin differ depending on whether you bought an Economy Standard or Economy Flexi ticket.

You can see that if you intend to upgrade to premium economy from an Economy Standard ticket, you’re looking at a very hefty premium in terms of miles, roughly 45-65%. I honestly don’t think that SQ’s premium economy experience is worth that kind of premium, especially given that they’re trying to monetize the cabin via an upgrade bidding program and that the quality of the product has gone down in recent times.

Here’s how it looks if you want to upgrade from Economy to Business Class.

Thankfully, the miles premium here is much more reasonable, hovering around the 20-30% mark. I’d certainly welcome this change insofar as it opens up business class upgrade possibilities to those in slightly cheaper ticket classes. However, SQ’s premium economy is expanding throughout the fleet and as time goes on there will be fewer and fewer aircraft without such a cabin.

I would really have liked to see Krisflyer introduce a way of upgrading from Economy to Business Class even when Premium Economy exists, albeit for more miles, but that’s not happened here.

Increase in Krisflyer Award Fees

From 1 March 2018, SQ will revise the fees it charges for changing, cancelling and refunding award tickets. These changes are without exception bad across the board.

Here’s what the existing schedule of fees looks like:

And here’s the revised fee schedule:

To make it easier to compare I’ve put the two side by side

A few important points to note

• Unlike the old system where elite members enjoyed discounted Krisflyer service fees, the new system charges flat fees to everyone, differentiated only by whether they chose a Saver or Advantage awards
• Free date changes are going away for Saver awards. It will now cost you US$25 to make a date change on a SQ/MI operated flight
• Change of routes/cabin class/award type fees on SQ/MI flights increase marginally from US$20 to US$25
• Changing partner award tickets will now cost you significantly more- up from US$20 to US$50
• Krisflyer used to have the cheapest award cancellation fees around at only US$15 for elite members. Those have increased by up to five times to US$75 for Standard awards and to US$50 for Advantage
• No show fees are going up significantly from a US$75 standard fee to up to US$300 if you’re in First Class. The new no show fees do not depend on whether you have a Standard or Advantage ticket
• The only silver lining? It appears, and I emphasize again, appears, that there is no more late change fee. Unless they count a change within 24 hours as a no show…

On the whole these changes move Krisflyer’s fees more in line with other carriers. It certainly will sting a lot for those of us used to cheap cancellation and redeposit fees (which could often be waived by asking nicely for a “one time exception”). Moreover, this means that if you’re planning to use the stopover trick, you might want to consider how often you move your second leg as it now attracts a penalty fee.

One important point raised in the FAQs- if your award ticket was issued PRIOR to 1 March 2018, the old change fees apply the FIRST TIME your ticket is changed. Subsequent changes will be as per the new schedule. This means you will still have one free date change for tickets issued before 1 March 2018, but subsequently it will cost you.

Conclusion

On some level, I understand why these changes were made. Part of SQ’s profitability strategy depends on its ability to compete for the regional market of business and leisure travelers. Leisure travelers do benefit from earning more miles (a tool that SQ has the ability to devalue at will, if need be), at the expense of having to pay for seat selection (something that is annoying, but not big enough a deal breaker for SQ-or-bust Singaporeans). Business travelers who are able to forego flexibility can get access to (hopefully) cheaper Lite tickets.

One important thing that we’ll need to observe and keep track of is whether this change becomes a stealth price increase. When US carriers introduced restricted economy, the way they sold it was that passengers who wanted a cheaper, unbundled experience could now have it. But what they didn’t say was that this was a defacto price increase, as all they did was rename the cheapest bucket of tickets “restricted economy” and increased the price of everything else. So they basically took away benefits from the cheapest tickets with the hope of upselling people to more expensive fare classes.

I’m not saying that’s what SQ is doing here, but to the extent that, say,  Business Lite fares aren’t actually any cheaper than the current Business Saver fares we’ll have some inkling of what’s going on. We’ll know much more on 20 January, I suppose.

I’m divided on how useful the ability to upgrade Economy Standard tickets to the next highest cabin is given the very high premium that needs to be paid over Economy Flexi for premium economy upgrades, as well as the fact that upgrades to Business Class will become more and more rare as premium economy proliferates throughout the fleet.

For those of us chasing miles, the biggest hit will probably be the change in award fees. Although these are still reasonable in the grand scheme of things, they’re one less thing that Krisflyer has working for it.