Should you pre-emptively book awards now to avoid the KrisFlyer devaluation?

Last week, Singapore Airlines announced several changes to its KrisFlyer program, the most important of which was that award costs will increase by up to 12% on 24 January 2019.

You now have just about two weeks left to figure out how the devaluation impacts you, and what you can do about it.

Many people have been asking whether it’s a good idea to burn all their miles on awards now, so as to avoid the price increase. In this post, let’s look at what options exist and the pros and cons of taking each one.

How to avoid the 24 January price increases

First things first: if you want to lock in the current award chart pricing, you need to book an award flight on Singapore Airlines before 24 January. Awards can be booked for flight dates up to 355 days in advance, so you could potentially look as far out as Dec 2019/Jan 2020.

You’ll subsequently be able to change your travel dates after 24 January without having to pay additional miles. A change fee applies, which is:

• US$25 fee with a Saver ticket,
• Free with an Advantage ticket.

Do note that the fee is per change, per ticket, so if you’re flying a family of four, you’ll pay a total of US$100 per change. Assuming you’re only going to change your dates once, the cost may still be worth it, particularly if you’re traveling to a destination that is seeing a larger price increase.

There was some confusion earlier about this because of the FAQ section on the SQ website:

Q6: If I make changes to my redemption booking or ticket on/after 24 January 19, which mileage level will apply? 
A: The revised award levels will apply for changes to your redemption bookings/tickets made on/after 24 January 2019. Members with existing redemption bookings/tickets who wish to change travel plans are advised to make the changes before 24 January 2019, for the current award levels to apply.

One way of reading this is that any changes on/after 24 January would attract the new mileage prices. This would be strange, as historically speaking, only changes that required a ticket reissue (name change, routing change) required a miles top-up.

I reached out to Singapore Airlines, who confirmed this: 

There you have it- date changes do not require a re-issuance of your ticket, and therefore will not require any top-up of miles.

Remember: if you’re waitlisted and your waitlist clears on/after 24 January, you’ll need to pay according to the new award chart, notwithstanding the fact that you waitlisted before 24 January. Similarly, if your waitlist cleared before 24 January, but you only ticketed on/after 24 January, you’ll pay according to the new award chart. All that matters is when your ticket is issued!

Burning all your miles now preserves their value

It sounds kind of counter-intuitive, but the best way of preserving the value of your miles is to burn them. That’s because any miles left in your KrisFlyer account will automatically decline in value by up to 12% come 24 January. By not spending your miles, you automatically accept this haircut (unless you only redeem economy class flights, which aren’t increasing in price).

But let’s think about it a bit more realistically- suppose you have 500,000 miles in your account and only redeem tickets for yourself. There’s no way to cash out your entire balance short of redeeming several Business/First Class flights in the space of 355 days. And unless you’re retired or not working full-time, it’s going to be a stretch to take that much leave.

In the end you might end up paying a US$75 cancellation fee per ticket to recover your miles if you can’t fly, which would put you in a worse off position (out of pocket fees, devalued miles) than if you just did nothing.

This should perhaps serve as an object lesson on why miles are not to be hoarded. Those who have consistently kept their miles balance in check by regular earning and burning should be able to cash out what’s left for one good trip. Those who have hoarded miles may find themselves having to accept a devaluation on at least part of their balance.

If your points are still on the bank side, consider keeping them there

The advice in the previous section applies to you if your miles are already in your KrisFlyer account. But what if they’re still on the bank side?

If they are, I feel there’s little reason to rush to convert them all to KrisFlyer miles. That’s because bank points have the flexibility to be converted into currencies other than KrisFlyer. Most banks in Singapore partner with Asia Miles (protip: check out multi-carrier awards), and if you bank with Citi, you have the widest selection of airline transfer partners in Singapore.  British Airways Avios, Etihad Guest, and Turkish Airlines Miles & Smiles, can be incredibly useful programs, depending on where you want to go.

We cover the ins and outs of FFPs other than KrisFlyer in our Alternative Frequent Flyer Programs workshop. I’ll be running another class on 24 January (more in a separate post), so be sure to check it out if you’re interested!

If you can’t burn your miles, at least look forward to February Spontaneous Escapes

Singapore Airlines will be making Spontaneous Escapes a permanent feature from February 2019. The announcement teased that the February edition (released on 15 February for travel in March) would feature “never-before redemption deals”, and after that kind of foreplay, SQ better deliver.

The typical Spontaneous Escapes discount is 30%, which would already more than offset any of the 24 January award price increases. The catch, however, is that awards booked under February’s Spontaneous Escapes will only be valid for travel in March 2019 (if US destinations are available, travel in April 2019 might be possible based on past patterns). Moreover, Spontaneous Escapes awards cannot be changed or cancelled.

Most people won’t be able to travel on such short notice. Therefore, even if February’s Spontaneous Escapes contain some monster deals, not everyone will be able to take advantage of them.

Conclusion

If you have just enough miles to burn on a nice trip for you and your family, now’s the right time to pull the trigger. Don’t get overly attached to your miles balance- they were earned to be burned!

If you’re in a situation with too many miles and not enough time to burn them, my commiserations. At least this “lesson” won’t be as painful as previous ones, where the devaluation could be as high as 30-40%. Burn what you can conceivably travel in the next 355 days, and try and keep a smaller balance in the future.

If most of your points are in flexible currencies like Citi ThankYou points, I’d recommend keeping your powder dry and transferring points as needed. Be sure to study other FFPs to see where their sweet spots lie.