If you know how to play the air miles game, it can be worth thousands of dollars to you every year. In addition to having the right air miles credit cards best suited for your lifestyle and allocating your day-to-day spend on these cards, a platform like CardUp will help you earn even more miles for larger payments, such as rent, tuition fees, insurance premiums and taxes, otherwise not payable by card.
So how do you determine the value of a mile, what is the cost of these miles and which are the best air miles credit cards to go for?
Factors which influence the value of a mile:
Which cabin class you fly in
Length of the flight
Timing and destination of your flight
The type of tickets and frequent flyer programme
How far in advance you book the tickets
Here are the key elements which will help determine the overall value of your miles.
1. Which cabin class you fly in
Air miles are worth a lot more if you redeem them for first class or business class flights, rather than opting for economy class.
Most people assume they should automatically go for the cheaper option and redeem an economy class ticket, but this is rarely the case. If you work out the value of your miles by taking the average cost that your ticket would have cost you and divide it by the total number of miles required for the trip, you’ll realise that you’re not actually getting a lot of value out of your miles if you redeem them for economy class flights.
For example, if you’re looking at a return flight from Singapore to Tokyo on economy class with Singapore Airlines, it will cost you anywhere between $1,000 to $1,400 to buy a ticket, or 50,000 air miles to redeem a ticket – so the value of your miles would be $0.02 to $0.028. If, however you fly from Singapore to Tokyo return business class mid-week, the flight will cost around $3,600, and number of miles required for the trip would be 94,000 therefore the value of your miles would increase to $0.038.
Miles required to redeem
Approx. derived value of a mile
Economy class return from Singapore to Tokyo
$1,000 - $1,400
2.0c to 2.8c
Business class return from Singapore to Tokyo
3.8c (+35% to 90%!)
Another strategy is to save up your air miles so that you are able to use them for an upgrade. If you use your miles to upgrade to a business class ticket from an economy class ticket bought using cash, you’ll get even better value than redeeming a business ticket with your miles. For example, if you fly Singapore to Hong Kong with Singapore Airlines one way, it will cost you 30,500 miles to redeem a business class seat and only 18,500 miles to upgrade from economy to business class.
No better excuse to grab that upgrade then!
2. Length of the flight
Your miles will be worth a lot more when you redeem them for long-haul rather than short-haul flights. It makes more sense to purchase tickets for shorter flights and earn mileage on them instead.
Think about it, it’s better you spend a few hundred dollars on a Singapore-Bali economy class ticket, and save your miles to redeem a more expensive business class ticket to New York – something that you might not normally spend your cash on.
For example, a business class round-trip to Bali will set you back around 38,000 air miles. Based on an average ticket price of $1,130, that equates to a value of $0.029 per mile. Whereas a business class round trip to New York requires 190,000 miles based on an average ticket price of $7,000, coming in at the higher value of $0.036.
Miles required to redeem
Approx. derived value of a mile
Business class return from Singapore to Bali
Business class return from Singapore to New York
Travel long-haul and you’ll get much better value for your miles!
3. Timing and destination of your flight
When and where you are flying will affect the value of your miles. For example, if you are flying during a peak period, over a public holiday or the weekend, or flying on a particularly popular route, you will get a lot more value out of your miles.
You might occasionally find a deal if you fly one of these peak times and book far in advance, but more often than not you will find the airlines want you to spend significantly more miles than the minimum, which makes your miles less valuable. Being flexible is the key.
4. The type of tickets and frequent flyer programme
Most airlines have saver award seats which let you use the least number of miles for an award ticket. These are usually capacity controlled and aren’t usually offered during the peak season such as during the holidays and summer. You should book as many saver award tickets as you can when you find seats, because if you wait, the award tickets may no longer be available.
If you know you’ll be flying to a further destination such as London in the future, you can also get more value by saving miles on a frequent flyer programme that gives the best value for that particular destination. For example, a one way business class flight from Singapore to London requires less air miles using Asiamiles (70,000) rather than Krisflyer miles (92,000). This will give you even greater value out of your air miles!
5. How far in advance you book your flights
If you book one-way flights, you can secure an outbound flight even before your return date becomes available. Airlines start offering their mileage seats, in limited quantities, around 330 days before departure date. Once these are taken, they may not become available again to air miles holders until just before the flight. Plus, if you hold your air miles with different air carriers, you can depart on one airline and return on another.
While there are many different factors that could affect how a mile is valued, at the end of the day, it is down to your own travel habits and preferences. It is not always about spending your miles on the cheapest option but instead, spending on something that gives you the most value.
As a rough guide and summary to the above points, it is definitely more ‘valuable’ if you redeem your air miles for flights to further locations, and on the higher quality flight classes. Here’s a handy table you can refer to as a rule of thumb:
1 air mile = ~$0.02 to $0.028
1 air mile = ~$0.025 to $0.04
1 air mile = ~$0.05 to $0.07
This however means that you’d require more miles – but what if you do not have any more day-to-day expenses to put on your credit card?
CardUp allows you to rack up even more miles, by placing your large, recurring payments such as your insurance premiums, rent, education fees, taxes and more onto your favourite miles cards, even if your recipients do not accept cards. This effectively increases the number of miles you can earn each month, without an increase in your expenditure. Before you know it, you’ll be swigging champagne, on that first-class flight to New York!