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How much is a Krisflyer Mile worth?

While the value of a cashback card is very obvious - you basically get “value” equals to the cashback rate, it is much more complicated to evaluate the value of miles cards because of the difficult question of determining “How much is a mile worth to me?”.

This is especially important because there are many ways to legally “buy” miles. For example, DBS Altitude had a sign up promotion that gave 10,000 miles if you volunteered to pay the first year annual fee of $192.60 (which is usually otherwise waived) - meaning you can effectively buy 10,000 miles at a rate of 1.92 cents per mile.

Many similar cards like the Citi PremierMiles also have related policies where they would award you bonus miles if you choose to pay your yearly annual fees (instead of waiving them).

To figure out whether deals like these make sense, we need to know the value of a mile. Unfortunately, there are no clear-cut ways to determine the exact value of a mile because it greatly depends on how you intend to use it. But lets go through some different ways of valuing a mile so that you can come up with your own answer :wink:

For all our analysis, we will stick to Singapore Airlines’ Krisflyer Miles since that is still the most popular Frequent Flyer Program amongst Singaporeans

Different Ways to Value an Airline Mile

Most people accumulate airline miles on their credit cards for the chance to redeem a flight ticket using their miles, but the valuation of your miles varies significantly based on the cabin class you take. As an example, I compiled the numbers for a return flight from Singapore to Tokyo via Singapore Airlines using the cheapest available ticket options, for a set of randomly selected dates (1-8 Sept 2020)

Class of Travel Dollar Cost (A) Miles Cost (B) Value Per Mile (A/B)
Economy $649 50,000 1.3
Business $3099 94,000 3.3
Suite/First $8699 140,000 6.2

The exact value you will actually get varies depending on the specific countries and dates you look at, but these values shown are very much in line with what you would expect to get if you try out different flight itineraries yourself

As you can see, you get much more value for your miles when you redeem a premium cabin flight as opposed to Economy class. This is because premium cabins cost multiple times the price of an Economy flight while the difference for miles redemption is much lower. Because of this, to get maximum value from your miles you should generally seek to redeem your miles for premium (Business, First) cabin flights.

Besides redeeming it for a flight, there a few other ways to think about how much a mile is worth

1. Buying/Selling Miles Online

First off – buying and selling of miles is generally against the terms of use of all frequent flyer programs, and we are not advocating you to go do so. But that there is a market available means that we can find out how much others think a mile is worth. For example, you can find people selling miles on Carousell for prices ranging between 1.5-1.9 cents per mile, depending on the size of your transaction.

Example of a seller from Carousell

2. SQ Pay With Miles

Singapore Airlines has a program Pay With Miles that allows you to pay for a flight using a combination of cash and miles, allowing you to use your available Krisflyer miles to offset the price of the ticket. This program is especially helpful for those who have some miles in their Krisflyer account, but not enough to make a proper flight redemption.

Unfortunately, Pay With Miles gives really really bad value, and only converts miles at a fixed rate of 1.02 cents per mile

Booking a flight using SQ Pay With Miles feature - you can see that paying with 980 miles reduces the amount payable by $10, an effective rate of 1.02 cents per mile

Unlike for cashback cards, there is no easy, scientific way to determine the value of a mile because so much of it depends on how you end up spending it and how much you value a Business/First Class flight experience.

Drawing from these different various data points, at WhatCard we typically consider a mile to be worth anywhere between 1.5 to 2.0 cents. If you don’t like this fluffy range and instead prefer a single number from us, we would go with 1.7 cents per mile

Summary

Figuring our the value of an airline mile has always been more of an art than science since it is very much dependent on how much you personally value the opportunity to have a Business/First class flight experience. Everyone has to come up with their own answer, but we hope that the data points given above can help you to reach a satisfactory answer for yourself!

Personally, I would never pay $3k++ just for a Business Class flight to Tokyo, and it is only through my credit card miles that I have been able to do so, and it is more of a one-off fun luxury experience - for every other flight I have to pay with my own cash I default back to picking the cheapest budget airline available :stuck_out_tongue:

But by having a personal gauge of the value of a mile, it helps greatly in deciding whether it makes sense to take part of promos like the DBS Altitude one above, or even using services such as CardUp/iPayMy that basically let you (legally) “buy” miles in exchange for some fees.

Let us know in the comments below how much you personally value a mile and how you came up with that number!


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