Could not find an article online about how much air miles are worth, so I decided to write one myself.
First things first: Air Miles or Cashback?
This is the thing that has split the internet since the dawn of credit card rewards.
Both sides will have their fair share of arguments to support their team, and we are not going to get into it.
Instead, today, we will be going into the math of air miles to determine if it is valuable to us.
How Much Are Air Miles Worth?
If you ask different people, there will be different answers, particularly depending on which credit card you use and which airline you are transferring the miles to.
Using SIA flights as the basis of comparison, we compared how much each miles are worth based on their corresponding flight cost.
So for a 1-way ticket to New York, it will cost $2908.50 or 75k KrisFlyer miles + $120.10.
This makes the miles worth about 3.7¢ each ( [2908.50-120.1] / 75k).
Business Class Flights
If you take Business Class flights, then the air miles will be worth much more.
*Miles and flight cost calculation are done based on flight searches done on 22 June 2023 for flights flying on 17 October 2023 and returning on 27 October 2023. Different searches/flights may get differing results. These cost/rewards are also subjected to changes based on the credit cards and airlines' discretion.
Recommended Read: Why You Should Max Your CPF Retirement Sum Early
Is It Worth It To Redeem Miles For Flight?
It depends on how much are you paying for your miles.
For example, if you use the Citi PremierMiles card, the card rewards you with 10,000 Citi Air Miles (equivalent to 10,000 KrisFlyer miles), if you pay the annual fee of $194.40.
This means each mile cost 1.94¢.
You probably don't want to be using them to redeem economy flights to Tokyo because mathematically, you are better off paying cash for the flights (it'll cost 1.9¢ instead of 1.94¢ per mile).
But it is definitely worthwhile if you redeem it for a economy flight to New York, which cost 3.7¢/mile -> you get almost a 50% discount redeeming the annual fee's miles for the flight.
But, if you are just going about your day and earning miles on your usual spending for free, then the cost/miles to you is $0.00.
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So...What Are The Cons of Redeeming Miles?
1. Not much flights available
For example, if you chose to pay cash for trips to Tokyo, you will see more than 5 flights available to choose from.
But if you choose to redeem miles, there's only 3 flight options available.
However, this could due to late booking (book earlier if you want to use miles) or could be just that miles aren't as "flexible" as cash.
2. Waitlist for Flights
Simple to understand booking mechanism: you see seats that are available and you can instantly book them.
Then, SIA decided to be special and gives you this option to be on a "waitlist" for a flight - which I cannot understand because not every flight has this waitlist thing.
If the seat is available, why can't I just book it instead of having to wait?
If the seat is not available but I am allowed to be waiting for a seat to "become available", why can't I be allowed to "waitlist" myself on any and every other flights that are full?
I don't understand the logic for this, but it is what it is.
And apparently, quite a lot of flight seats are "waitlist" seats, especially business class seats.
Recommended Read: Why is CPF Ordinary Account Interest Not Rising?
Conclusion
Knowing how much you paid for your miles is crucial in knowing if it is worthwhile redeeming them for certain perks.
In general, miles are much more worthwhile redeeming for flights than they are for hotels, vouchers, or other rewards.
However, as you can see from our calculations above, not all flights are redeemed equal, and it is best to check which mile redemption gives you the best bang for your buck!
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