SINGAPORE - Travellers will need to spend more air miles in order to redeem flights under Singapore Airlines' (SIA) frequent flier programme from July 5.
The airline announced on Tuesday (June 7) that it will increase the air miles needed to redeem the rewards after taking into account higher costs. The move is a result of SIA's ongoing review of the KrisFlyer programme.
"We seek your understanding that these changes were made after very careful deliberation, taking into account higher costs, and are necessary to ensure the KrisFlyer programme remains sustainable," said SIA.
It said in an e-mail to customers that it will increase the cost of redemption for flights by an average of 10 per cent. This will apply to award and upgrade levels on flights operated by SIA, Star Alliance member carriers and SIA's partner airlines.
SIA also said that stopovers for eligible redemption bookings ticketed on or after Aug 1 will be limited to a maximum of 30 days.
Complimentary stopovers exceeding 30 days, as well as the paid stopover option, will no longer be available for tickets issued on or after Aug 1. The existing policy had allowed travellers to effectively redeem flights using fewer miles.
Under SIA's frequent flier programme, air miles - which are named KrisFlyer miles - can be earned through buying flight tickets or credit card spending, among other options.
These miles can be used to buy items at SIA's KrisShop or converted to points in partner reward programmes. But they are mostly used by travellers to redeem free flight tickets or to secure upgraded seats on flights.
News agency Bloomberg had reported last May that liabilities tied to the five most valuable airline-loyalty programmes in the United States soared almost 12 per cent to US$27.5 billion (S$37.8 billion) in 2020. It cited an expert who said airlines that have gone through financial issues would look at devaluation of miles as a way to make up financial ground.
Mr Aaron Wong, founder of Singapore-based travel website MileLion, told The Straits Times on Wednesday that the devaluation in SIA's KrisFlyer miles was not unexpected given that air traffic is recovering at a faster-than-expected rate.
"When load factors are low, it costs the airline very little to offer a seat for miles," he said.
"But when load factors are high, every passenger redeeming miles may be taking a seat from a passenger who would have been willing to pay cash."
He noted that the hike is not as drastic as it could have been, with the most popular Saver awards on SIA increasing between 8 per cent and 16 per cent.
On how much additional credit card spending a traveller would have to rack up to redeem flights with SIA's revised miles redemption structure, Mr Wong cited the example of the round-trip business class award to South Korea.
This costs 94,000 miles now, but will increase to 104,000 miles when the new redemption structure kicks in, he said. The difference of 10,000 miles is equivalent to an additional spending of $2,500 to $9,000, depending on what card a traveller uses, said Mr Wong.
"While there is no need to empty out your entire KrisFlyer miles balance, I would encourage those who have an inkling of where they'd like to head to for their next vacation to try and book before July 5, because they can always change the dates without attracting the new prices.
"It is also important to remember that any award wait lists that have not cleared by July 4 will attract the new pricing," he added.