What is the Value of a Mile and Why Should You Collect Them?

Previously, we discussed one of the approaches to maximise the number of KrisFlyer miles you could earn from your flights.  Today, we’ll attempt to answer a more fundamental question: What is the value of a mile, and why should you collect them anyway?

Are flights worth redeeming?

When thinking about redeeming flights using your frequent flyer miles, there are a few factors to consider, in order to determine whether to use your hard-earned miles.  First off, take a look around on flight search engines such as Google Flights or ITA matrix to determine whether there are cheap flights that you could purchase with cash instead.  If nothing catches your eye, you could then take a look around on mileage redemption charts.  We’ll use Singapore Airlines’ KrisFlyer redemption chart for reference.

 

For the purpose of this explanation, let’s consider a return flight from Singapore to Sydney (zone 9 in the chart).  The factors we’ll consider to aid our decision-making would include the (1) price to purchase the ticket in cash, (2) cost in KrisFlyer miles, (3) value you get for a mile – (cash value of ticket / miles needed for redemption).  The prices below were based on fares for flights around 6 months away.

	Cash price (SGD)	Miles required	Value per mile (SGD)
Economy	743	56,000	0.013
Premium Economy	1,733	90,000	0.019
Business	4,213	116,000	0.036
First / Suites	8,413	160,000	0.053

The most salient thing you’ll notice from the table is that the higher up the airline classes you go, the more value you get out of your miles.  This is due to the price of a business ticket being approximately 6 times of economy in a cash, but about 2 times in miles.  For some flights you can get even greater VPM, for example, first class to Auckland and business class to Cape Town both grant close to 0.07 SGD/mile!

Lesson: Don’t be impatient and rush to redeem an economy class ticket the moment you can afford one!  Perseverance is rewarded handsomely in the mileage game.  This is a lesson that I had learnt too late, as I committed the heinous crime of redeeming a return economy class ticket to Tokyo for 50,000 miles, a VPM of 0.013 SGD/mile!! ༼ ಥل͟ಥ ༽

 

Bonus: If you’re up for a spontaneous trip in November, and have some miles to spare, Singapore Airlines is running a 30% off redemption promotion to several destinations.  There are some excellent values to be had, such as a return business class ticket to Wellington, New Zealand for 81,200 miles, equivalent to 0.069 SGD/mile!

The value of purchasing miles

Having a sense of the monetary value of a frequent flyer mile now opens you up to the world of purchasing miles.  Two of the more prominent loyalty programmes on which to purchase miles are Alaska Airlines’ Mileage Plan, as well as Avianca’s LifeMiles.  You can purchase miles with cash on these platforms, the former at a price of USD 0.0275 per mile, and the latter at USD 0.033 per mile.  However, both platforms regularly run promotions on the purchase of miles reducing the price to less than USD 0.02 per mile (SGD 0.027).

Both loyalty programmes have numerous airline redemption partners, e.g. you an redeem Japan Airlines or Cathay Pacific flights with Alaska miles, and ANA and Lufthansa flights with LifeMiles.  Therefore, if you’ve set your heart on flying in a premium cabin on one of the above airlines, do a quick bit of math (and check the relevant redemption charts) to find out whether you’re better off paying cash or buying miles and redeeming award tickets.  However, award availability is often scant, so this approach would only be realistically useful for trips planned comfortably in advance, with some flexibility in scheduling.

Concluding thoughts

When purchasing flight tickets, it is perhaps useful to think of miles as another form of currency.  In some cases, purchasing miles in order to redeem flights may actually save you a fortune, especially for premium cabin products.