My take: KrisFlyer devaluation and the end of The Stopover Trick

While we made it through the worst of COVID-19 with the KrisFlyer programme unscathed, there’s a certain inevitability to devaluations. It’s kind of like standing outside and declaring it’ll rain: sooner or later, you’ll be proven right. 

On 5 July 2022, Singapore Airlines will hike the cost of award tickets by 8-16%, the first increase in 3.5 years. This will be followed by a stopover policy change on 1 August 2022, which caps complimentary stopovers at 30 days and removes the ability to add paid stopovers. 

There’s a lot of analysis to be done, but I want to make one thing clear: this is not a run-for-the-exits devaluation. In the grand scheme of things, it’s more annoyance than anything else (even if Singapore Airlines’ reference to an average increase of 10% creates the perfect opportunity to use the term “decimation”).

If you’re able to book a few speculative awards, go ahead and do so. However, you should be doing this because you think there’s a decent chance you might be able to travel on those dates, not because of a sense of FOMO.

Here’s my thoughts on what’s happened. 

A devaluation was inevitable

Singapore closed its borders in March 2020, and it wasn’t until September 2021 that they reopened under the VTL.

That’s an 18-month period (even more, if you consider that most people waited till December 2021 to start travelling), during which we saw some fantastic mileage accrual opportunities.

• KrisFlyer offered an uncapped 15% transfer bonus in November 2020 (and again in November 2021)
• 8 mpd offers by cards like the OCBC Titanium Rewards and Citi Rewards
• Uncapped 4 mpd offers by cards like the Citi PremierMiles and Citi Prestige

Sure, some people may have burned a portion of their stash on the ground, but it’s not the same kind of release valve that award flights normally offer. 

In that sense, a devaluation was always going to be inevitable, and what accelerated the timeline was the pace at which air travel recovered. Few expected passenger volumes to bounce back as quickly as they did; even the IATA had to bring forward its forecast for return to pre-pandemic figures by a full year. Take a stroll through Changi now, and masks aside, you’d be hard-pressed to tell we’d just suffered a global pandemic. 

When load factors are low, there’s no pressure to devalue. Those seats would have gone out empty anyway, so the opportunity cost of giving it up for redemptions is close to zero. But when people redeeming miles start competing for seats with people paying cash, then something’s got to give. 

This devaluation is relatively mild

Let me make something clear: there’s no such thing as a painless devaluation. Whether we’re talking 1% or 100%, no one likes to see the goalposts shifted. 

But in the cold light of day, this upcoming devaluation is on the mild side. It’s nothing like the  March 2012 or March 2017 guttings, and given that Economy Class awards escaped the noose in January 2019, some award prices have gone more than five years without changing. 

The upcoming devaluation sees a 8-16% increase in Saver award prices prices, but most Advantage awards have gone untouched (which may very well change how people see the trade-off between Saver and Advantage; see The “Advantage Premium” section below). 

If you ask me, this isn’t a “burn everything now!!!” situation. I personally don’t have plans to cash out my entire stash before 5 July.

In fact, given that so much of my current stash was obtained through the recent 15% transfer bonus, I see the upcoming devaluation as putting things more or less back to square one. It’s the whole “give chicken wing take back whole chicken”, only in this case it’s more like “give chicken wing take back 75% of chicken wing” (11% increase/15% bonus). I’m still ahead, sort of. 

The table above suggests that the average cadence of a devaluation is now once every 2-3 years, and if the current price hike has bought us some peace and quiet for the near future, well, it’s not the worst thing that could have happened.

Fuel surcharges didn’t return

Speaking of not the worst thing that could have happened, Singapore Airlines eliminated fuel surcharges on revenue and award tickets back in 2017, and with jet fuel now 100% more expensive, I’m very, very thankful fuel surcharges didn’t return with the latest devaluation.

I mean, it’s not that big a stretch of the imagination for Singapore Airlines to say something along the lines of “sorry, fuel’s too expensive, surcharges are coming back”. Emirates did it, and if oil basically grows on trees in the Middle East… 

But the status quo remains. No fuel surcharges are payable on Singapore Airlines award redemptions, and the only cash you’ll pay is for airport taxes; currently S$52.30 for one-way flights out of Singapore:

• Singapore Airport Development Levy: S$10.80
• Singapore Aviation Levy: S$6.10
• Singapore Passenger Service and Security Fee: S$35.40

Spontaneous Escapes help take the sting out

Spontaneous Escapes

As you probably know by now, Singapore Airlines brought back Spontaneous Escapes in March 2022, with 30% off selected Economy, Premium Economy and Business Class awards.

Spontaneous Escapes will continue to be offered even after the devaluation, and for the sake of comparison, here’s how the post-5 July prices with 30% off compare to the pre-5 July prices. 

For example, a Spontaneous Escapes award from Singapore to Kuala Lumpur based on the post-5 July pricing would be 21% cheaper compared to the pre-5 July pricing. That’s obviously less than 30%, but helps soften the blow somewhat.

It’s a consolation for those who are able to travel on short notice (usually the following month) and don’t mind locking in their plans (Spontaneous Escapes cannot be changed or refunded).

The “Advantage Premium” is smaller

No one likes paying more than they have to, but if you can’t find Saver space and absolutely must travel on a particular date (and don’t want to buy a cash ticket), then Advantage awards are your best bet. 

Since Saver awards are increasing in price while Advantage awards remain relatively stagnant, one interesting analysis is to look at the so-called “Advantage Premium”, or how much more you pay to redeem an Advantage award instead of Saver. 

As expected, the Advantage Premium falls by 15% in Economy, 14%  in Business, and 16% in First. 

This can’t be an accident; I’m convinced it’s been done to nudge people towards booking Advantage awards. After all, you might be less inclined to choose an Advantage award if you see it costs 61% more than a Saver award, but if it’s available for immediate confirmation and the difference is 47%, well…

Stopovers still exist, but the stopover trick is dead

The KrisFlyer devaluation takes place on 5 July 2022, but the nerfing of the stopover trick takes place on 1 August 2022. This has led to a lot of confusion as to how existing tickets will be treated.

The way I see it, there are three periods to take note of. 

Period 1: Before 5 July

• All award prices follow existing award chart
• Paid stopovers can be added to awards for US$100 each, and be up to one year
• All complimentary stopovers can be up to one year

Period 2: From 5 July to 31 July

• All award prices follow new award chart
• Paid stopovers can be added to awards for US$100 each, and be up to one year
• All complimentary stopovers can be up to one year

Period 3: From 1 August onwards

• All award prices follow new award chart
• Paid stopovers can no longer be added to any award
• All complimentary stopovers have a limit of 30 days

Period 1 is the status quo. You can book one-way Saver awards at existing prices, and add stopovers of up to one year for US$100.

Period 2 is post-devaluation. You can book one-way Saver awards at new (increased) prices, and add stopovers of up to one year for US$100

Period 3 is post-devaluation, post-stopover trick. You can book one-way Saver awards at new (increased) prices, but cannot add stopovers (because paid stopovers will cease to exist).

To be clear, you can still have a stopover/stopovers on an award from 1 August 2022- just that whatever the ticket comes with is what you get. 

For example, if I book a one-way Advantage award, I’m entitled to one free stopover. Therefore, I could book an itinerary like BKK-SIN-LHR and add a stopover in Singapore, while saving on the miles required to book BKK-SIN and SIN-LHR separately.

But the value proposition is nerfed, because:

• You need to pay the more expensive Advantage prices
• The stopover is a maximum of 30 days, which means you need to be able to travel twice in quick succession

Therefore, the stopover trick, for all intents and purposes, is dead. 

Get those bookings ticketed…

Any awards ticketed up till 4 July 2022 will follow existing prices, regardless of travel date. Singapore Airlines releases award space 355 days in advance, so as of 4 July 2022, the latest you’ll be able to book a ticket is 24 June 2023. 

If you’re currently on the waitlist, you should do everything in your power to get it cleared by 4 July 2022. Unfortunately, that may not be a whole lot: 

We are unable to expedite the confirmation of your waitlisted booking. Waitlists for redemption award bookings will be automatically confirmed at any time when seats become available and you will receive an email update on the waitlist redemption confirmation.

-Singapore Airlines

If your waitlist clears from 5 July 2022 onwards, you will pay the higher prices, period- it doesn’t matter when you added your name to the waitlist. 

I suspect this is why the Singapore Airlines phone lines are jammed again, and PPS Connect hasn’t replied for 12 hours and counting.

…and don’t touch them!

Any changes made to an award ticket from 5 July 2022 onwards will attract the new pricing- whether it’s dates, flights, routes, whatever.

This is a change from how things worked during the last devaluation, where changes that did not involve a ticket reissuance (e.g. date changes) did not attract the increased pricing.

As I said at the start, if you’re in a position where you have a vague idea of your travel plans over the next 12 months, go ahead and book a few speculative awards. However, you should not be booking awards due to pure FOMO, because if your plans change, you’ll not only have to pay the new prices anyway, you may be looking at a US$75 redeposit fee per ticket.

Award availability may not improve the way some think it will

It’s hard to argue we’re not already in a soft devaluation situation of sorts, with long-haul Saver awards in First and Business Class increasingly difficult to find. 

I did a few searches yesterday and the only destination I was regularly able to find instantly-confirmable First Saver space was Jakarta; fun if you want to explore The Private Room, but not that useful otherwise. Business Saver is likewise difficult to find for Australia, Europe and the USA, unless you’re able to book a year in advance- and even then it’s not a sure shot for 2 pax.

Some believe that a hard devaluation will help address these issues, and while that’s mathematically true to an extent, we need to keep in mind that the mild increases will only price people out at the margins. I don’t believe that Singapore Airlines will change the amount of award inventory it releases following this devaluation (for better or worse), so what we have is a slightly larger sponge to soak up the outstanding miles. It helps a bit, but not dramatically so.

In other words, don’t expect to be magically booking 2x Suites Savers to London in the peak of December, just because prices have gone up.

Conclusion

KrisFlyer’s upcoming devaluation, while relatively mild, is still going to force the hand of many members. I fully expect there to be a flurry of bookings made over the next few weeks, though hopefully common sense will prevail and people won’t be hogging seats they have no real expectation of flying. 

This also has implications for how you should value a mile, the relative usefulness of KrisFlyer versus other frequent flyer programmes, and how to deal with existing award tickets with stopovers. I’ll be covering these in the days to come, but if you do have a question (that’s not covered in the FAQ), feel free to pop it below.

KrisFlyer devaluation: questions?