Are frequent flier miles and loyalty programmes more headache than perk?

Loyalty programmes are engineered to be complex and elusive so maybe the secret to enjoying them is to stop trying to outsmart the airlines.

- Karen Tee

Earlier this year, I finally managed to snag what every frequent flier dreams of – a coveted upgrade from economy to business class on a flight to Rome.

But getting to travel in style without spending money came at a different cost. It took me two hours on the phone with Singapore Airlines (SIA) to resolve a glitch in the redemption system.

I endured hold music, repeated explanations and had to stifle escalating frustration, just to access the perk that supposedly rewards my "loyalty" to SIA. When I finally boarded the much-awaited flight, I definitely felt like I deserved an extra glass of champagne after all that effort for the "unpaid" privilege of sitting at the front of the plane.

THE GRIND BEHIND THE FANTASY

That ordeal captures the essence of frequent flier programmes. They market the dream of free or upgraded travel, but the systems are designed to make redemption maddeningly complicated. In fact, that is the business model.

After all, there really is no such thing as a free lunch. It is no secret that airlines benefit from a certain amount of breakage – the term for miles that expire unredeemed – in their loyalty programmes, since seat redemptions and upgrades are limited. A McKinsey report estimates that 15 per cent to 30 per cent of airline miles end up unspent and this is considered a profit for the airline.

Another strategy airlines regularly use is devaluation by increasing the number of miles required for the same flights. This is why SIA's recent announcement of upcoming changes to its KrisFlyer programme hardly came as a surprise to industry watchers.

From Nov 1, the miles needed to redeem or upgrade most flights will rise by 5 per cent to 20 per cent. In other words, KrisFlyer miles are being devalued – though experts note this round is arguably less severe than many had feared.