The travel companies use pricing software based on algorimic supply and demand so the best deals come when the software identifies an excess supply based on time decay ( ie how long is left to departure date).
The greater the time decay ie the further away from departure the higher the price generaly is due to a low risk curve based on supply sold verses time decay.
However as time decays... the greater the risk curve becomes and the algorimic models will reduce prices in line with the risk curve by a set percentage dependent on the excess supply .
The key is to identify when there is excess supply ie aviablity relative to time decay to get the best deals.Most people will think thats as late as possable to departure. Its often not the case !
The most noticable time frame for large reductions is in the sub 28 day till departure time decay period verses excess supply. However as the supply reduces ( less avaiablity ) the computer price models will re-adjust the risk profie and often the price will start to increase realtive to risk.
Some travel firms it seems have better price models than others, Tui and First Choice come to mind. Mytravel seem to have a less sophisticated price model that does keep reducing based on time decay risk rather than factor supply.
If you get the basic idea of the this long winded post, on how the firms uses computers to set their prices, you can get a very good idea on when the prices will start to come down and conversly go back up.

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