Singapore Airlines is devaluing its KrisFlyer program on March 23, 2017. While the changes could have been far worse, there is no way to spin this as good news.
Singapore KrisFlyer Devaluation Details
- Singapore Airlines awards are going up moderately, anywhere from 10-15%
- Singapore Awards will also no longer be eligible for the 15% online booking discount, making the effective price increase 25-30%
- Fuel surcharges will be eliminated from Singapore Airlines awards
- Premium Economy Saver awards and all Singapore Standard awards will remain unchanged in price
- Star Alliance partner award prices will remain unchanged and fuel surcharges will still be collected
More Details on Singapore KrisFlyer Devaluation
For your reference:
- Old Award Chart (thru 22 March 2017)
- New Award Chart (effective 23 March 2017)
- Standard award chart (unchanged)
- Star Alliance award chart (unchanged)
Let’s look at one example.
Example: New York to Frankfurt on Singapore
Current Online One-Way Price:
- Economy Class = 17,000 + $179.60
- Business Class = 48,875 + $193.60
- Suites Class = 57,375 + $203.00
Price as of 23 March 2017:
- Economy Class = 22,500 + $5.60
- Business Class = 65,000 + $5.60
- Suites Class = 76,000 + $5.60
You can see this is not chump change and if you are able to book prior to March 23rd you should. Still, the changes could be worse. The new balance certainly constitutes a devaluation, but factoring in the reduced fee I do think we dodged a bullet since it has been five years since the last devaluation.
Changes on other routes are similar.
Three Observations on the Singapore Devaluation
1. Standard Awards remain a reasonable redemption option
While I always seeks to avoid pricer “standard” award redemptions, sometimes they just make sense. With Singapore, sometimes they make particular sense.
Let’s take our New York to Frankfurt example from above. A standard award currently costs 68,000 miles in business. That’s still cheaper than many airlines charge for a one-way SAVER business class ticket to Europe! On March 23, with the elimination of the 15% online discount, the price goes up to 80,000 miles, but give you access to a much greater inventory of seats. Plus, you’ll save $200 since there will be no fuel surcharges. First/Suites Class will be 130,000 one-way…not nearly as attractive, but there if you need it.
2. If you book now, you cannot refund fuel surcharges later under the old rates
My first thought was booking under the old rate than adjusting the fees later after March 23. It will not work. Singapore explicitly says—
We are unable to provide you with a refund on the fuel and insurance surcharges portion alone. However, you may opt to refund your existing ticket, with the applicable service fees.
3. We should not complain
Singapore did not try to sugarcoat this as a positive change. Instead, it stated the changes are “to ensure that flight rewards remain sustainable yet competitive.” In fact, prices do remain competitive. With transfer options from SPG, Chase, Starwood, and CITI, there are more ways than ever to redeem for Singapore. And Singapore gave us notice.
CONCLUSION
At FTU last weekend in Seattle, I told my audience that Singapore would soon devalue. The writing was on the wall: five years is a huge amount of time to go without a devaluation. These changes are not something I am celebrating. A 20-30% increase in award prices is a big deal, but we’ve seen much worse from the competition. Ultimately, I respect Singapore for not trying to spin this as something positive, even with the removal of fuel surcharges.
From Singapore’s perspective they’re not even saving money here.
They give up cash, effectively having you buy down the fuel surcharge and giving you more than a penny apiece in value to do it. In other words, they’re giving you more value than they generally book accrued liability at.
The airline decided to ditch fuel surcharges. So the program needed to make a change to remain as close to cost-neutral as possible.
We see this as a devaluation because we value Singapore miles at a price that’s greater than what Singapore sees them as a cost. SQ realizes that, so they aren’t sugar-coating it.
But once the airline decided fuel surcharges were gone (a good thing!) this was the best we could have hoped for since the program wasn’t going to bleed real incremental cash on every redemption.
That’s like saying a carnival crook or thief are not winning anything because they stopped robbing you. Fuel surcharges are a scam from awards perspective…no way to sugarcoat it. I’m willing to bet a lot of people were avoiding booking with them due to those…I know I did. Now they’ll get more bookings but at inflated rates…not competitive with most other *A programs.