The Math on redeeming air miles

I wrote quite a fair bit on earning air miles.  Most of you would go away thinking that it was such a hassle to earn and redeem air miles.

Hence, for friends were not so familiar with the system, let me illustrate with examples. 

It was very easy to redeem miles from SQ because they offered 3 rates of redemption which was saver, standard and full.  They referred to the same thing but the earlier you made the redemption, the easier it was to redeem a seat at saver rate.  Alternatively, you had to be really flexible about dates or timings. 

A redeemed ticket was a Flexi Saver ticket which meant you could make changes (i.e. cancellation available but at a fee) to the booking.  If you purchased it, it was the second most expensive tier of the ticket.  For SIA, the type of airfares ranged from Super deals, Sweet deals 2 to go, Sweet deals, Flexi Saver and Flexi.  Super deals were usually as low as 50% off the usual rate.  A child ticket usually cost the same as an adult’s super deal ticket.  I loved super deals, so when I could get that tier, I would not bother to redeem.  However, it was a no-cancellation & no-rebooking ticket, so you had to be really firm on the plans, unless something major happened and SQ would offer other advices.  The other 2 deals were also non-cancellation tickets.  There were also some destinations where it did not make sense to redeem due to high fuel surcharges, or number of miles required due to zoning. 

For a redeemed ticket, you could change the dates for free but would be liable for some charges if you wanted to change destination or cancel.  The charges would depend on the tier of KrisFlyer membership too.

A few months ago, SQ also rolled out this scheme where you could offset part of the tickets’ cost with air miles when you did not have sufficient miles for a full redemption.  However, that was at a different rate and calculated differently for each location so it was really difficult to assess the value per mile.  The rate was definitely not even half as attractive a full redemption on saver rate, hence, I really would not bother with that unless I had odd number of miles to expense off.  Even so, you would need to use a minimum of 5000 miles in the transaction.  Redeeming a return trip to Bali would only cost you 15,000miles or (12,750 miles if you did the redemption online by yourself).

I had started accumulating miles actively since April 2008.  Look how far this had gotten me literally!  Well, I guessed the persistence to collect the miles helped too. 

Destination: 2 air tickets to Japan
Period: Jun 2010
Impact: 2*85%*45000miles = 76,500miles

Destination: 2 air tickets to UK
Period: Jul 2011
Impact: 2*85%*70000miles = 119,000miles

Destination: 2 air tickets to Korea
Period: Dec 2011
Impact: 2*85%*45000miles = 76,500miles

Destination: 3 air tickets to UK
Period: May 2013
Impact: 3*85%*70000miles = 178,500miles

Destination: 3 air tickets to Korea
Period: May 2014
Impact: 3*85%*45000miles = 114,750miles
(i.e. SRP value S$2750, based on Flexi Saver ticket price)

Total # of miles redeemed to date = 565,250miles 
Balance miles in ‘bank’ = 2XX,XXX miles

If you had accumulated the air miles via credit card spending, the returns could be calculated as 3%-7% cash back depending on which credit cards you had used and if you had redeemed at saver rate.

4 responses to “The Math on redeeming air miles

  1. We really love air miles, and “collect” them entirely from the credit cards now that I no longer fly for work. The best part is, buying a Business Class ticket usually costs 2 x that of Economy, but sometimes the miles to redeem Business opposed to Economy is less than 2 x, so in some sense it’s “worth” to use miles! But like you said, when there are some really good deals, buying the ticket instead of redeeming is the way to go.

    • Yes, it is worthwhile to redeem for business class tickets. However, I always travel with my children for holidays so it is astronomical to do so, so I haven’t had the chance to redeem for that.

      I am happy to defray the holiday cost with using miles for air fares tho.

      I don’t like a lot of reward programs that the banks do too.. So I am all for collecting miles on credit cards too. Which cards do you usu use ?

      • Haha I know what you mean! Seems like a lot to pay for the little people who are really just happy with inflight entertainment.

        The various reward and discount schemes can be mind boggling! But we usually go with whom we have the most relationship with, so right now it’s DBS. I read that the UOB Privi is one of the best for converting to air miles.

  2. Thanks! This is useful! 🙂

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