It goes without saying that Singapore Airlines is in more than a little bit of trouble. Also obvious is that one of the first things that’s on every KrisFlyer member’s minds – at least those with a substantial number of miles in their KrisFlyer account – would probably be what happens to their KrisFlyer miles if the impossible happens and Singapore Air does indeed go belly up.
In the unlikely event Singapore Air goes bust and doesn’t get rescued by someone with deep pockets, I’d imagine they’d undergo liquidation, and their assets would be sliced, quartered and sold to repay creditors. Are we creditors of Singapore Air if we have miles in their account redeemable for flights? I am not a lawyer/accountant but I am pretty sure this is a big fat no.
As much as miles are worth money and their books probably list the outstanding miles of KrisFlyer members as a deferred liability, they are ultimately points in a rewards programme, and I can’t imagine we’d get anything at all in the doomsday scenario SQ collapses. Stockholders would sooner get some money back than mile owners even if there were anything left after creditors are done with SQ’s hypothetical dead body.
What can we do about this scenario?
1. Hang on tight to your bank points
Thankfully, most people would have been earning bank points rather than straight-up miles. Unless your points are expiring soon, you should obviously not transfer them to KrisFlyer or any other airline programme until the situation becomes clearer.
Unfortunately, if your points are indeed expiring soon, you could explore other redemption options your bank offers you to see if anything makes sense. Travel$ on your OCBC 90°N, for instance, lets you get cash rebate at a rate of 1 mile = 1 cent. It’s pretty decent if you’ve earned 4 or 8 mpd on this card.
Tougher luck if your points are something like DBS Points, since DBS lets you offset your card bills at a paltry 1 mile = 0.5 cent rate. Nevertheless, their reward catalog has some redemptions that pushes each mile to about 0.7 cent such as Best Denki, FairPrice, and Popular vouchers. Not too bad if the number of expiring miles isn’t too big.
2. Spend on KrisShop
Alas, I recently converted 70,000 miles into my account as I had a bunch of miles expiring, and I intended to visit a friend in the States. Unamusingly, my friend is already back in Singapore amidst this viral mess, and all I did was save a few thousand miles from expiring but ended up transferring the whole bunch of bank points over. I rightfully wanted to get my money’s worth out of the $25 conversion fee, but I have ended up with 100,000 of miles that has a (tiny?) chance of being worthless.
My mile balance now stands at about $1,000 to $1,250 if redeemed fairly efficiently, but unfortunately there are no efficient redemptions at the moment. No Suites, no business class, no economy flights… nothing but potential bankruptcy.
So if I’m paranoid and wish to offload my miles, KrisShop is a logical place to go to. I’m familiar with Apple products, and it appears that you get a value of 0.85 cents per mile if you used your KrisFlyer miles for it. It’s not the worst deal in the world, especially if you have been earning your miles efficiently, and your motivation is to hedge against a potential disaster. 0.85 cents > 0 cents.
Sadly, the new iPad Pros are nowhere to be seen, and most of the Apple products are currently in the mid of their product cycles, which results in a poorer redemption value. A new Series 5 Watch is really tempting, but we’re probably only six months away from Series 6.
Well, there’s a price to pay for
paranoia hedging your risk.
3. Keep calm and pray
Anyway, I do understand that this is something that is very unlikely to happen, so you shouldn’t rush to spend your miles suboptimally if they’re not expiring.
Now, let’s hope that the powers that be give Singapore Air some Leeway. Is that an accidental capitalisation, or is Temasek Holdings the top stockholder at 55% ownership? Hmmm. We truly live in unprecedented times because I never was curious about who owned our national carrier until today.
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