Airlines give better fares to people who advance book because they are
trying to encourage people to book as early as possible. If the
airline were to lower fares just before flight time there would be a
flood of people (on random flights) at the last minute. Airlines need
an accurate estimate of the number of people and amount of baggage on
a flight so that they can load the proper amount of fuel.  (Meals and
beverages also have to be loaded.)

Moreover, people who book at the last minute are usually flying on
business, and therefore the business is paying for it.  People flying
for pleasure usually know weeks or months in advance, and can't afford
the prices that a business would pay. Thus it is to an airline's
advantage to set rates according to the major differences between
business and leisure travelers:
    o  Business travelers fly mostly between 9 and 5, whereas leisure
       travelers can fly offpeak hours. 
    o  Business travelers buy tickets on very short notice, whereas
       leisure travelers plan trips well in advance. 
    o  Business travelers do not stay over a weekend (= Saturday
       night), whereas leisure travelers do. 
So airlines typically give discounts for people who stay over a
weekend, flying offpeak hours, and purchasing tickets 7 days, 14 days,
21 days or 30 days in advance. Such fares are known as excursion,
discount, or supersaver fares. 

For example, US domestic excursion fares require that you buy
your roundtrip ticket 7 days, 14 days, or 30 days in advance, and that
you stay over a weekend (usually Saturday night, though sometimes
Sunday night as well).  Some may also restrict the travel to a
30-day maximum stay. Stopovers aren't allowed, except for the purpose
of connection (if you want a stopover, you'll have to pay extra).
Some fares may be limited to a particular routing (e.g., routes with
connections cost less than nonstop flights). You may also be limited
to flying during offpeak hours, with flights during the busiest times
of the day costing more. Tickets are usually non-refundable and
non-transferable, and may either be non-changeable or have a $35
change fee. The price is usually the average of the two one-way
tickets.  (E.g., a 2-week advance PGH/BOS advance ticket is around
$200 this way.) Tickets must be purchased within 24 hours of the
reservation. 

For international excursion fares, also known as apex fares, you must
book at least 21 days in advance of the flight, and you may have to
purchase the tickets at the time of the reservation. Minimum stay is
usually 7-10 days, and maximum stay can range from 3 months to a year.
Midweek travel (Monday, Tuesday, Wednesday, or Thursday) is usually cheaper.
Tickets are non-refundable and non-transferable. Fares often depend on
the seasons.

Since a regular 1-way ticket is so much worse than a round-trip
excursion fare, it sometimes pays to buy a round-trip ticket and throw
away the other half (if you're only going one way). If you buy a round
trip ticket and throw away the other half, make the first leg of the
trip the destination, since some airlines will cancel the return trip
if you don't show up for the first leg. If you intend to skip ONE leg
of a multi-leg flight, tell this to your reservation agent in advance,
so that they can annotated your PNR to prevent subsequent legs from
being cancelled. (Note: You can't use this technique to exploit a
"hidden city" fare. You'll have to have a very good reason for
skipping a leg for the travel agent to allow it, and you may have to
pay a different fare to do so.)

For example, a round-trip to San Francisco from Pittsburgh with a
one-night stayover is $1,333. However, the cost of a Saturday night
stayover is only $479 if you order the ticket a week or two in
advance. Purchasing two round trip tickets, one originating from Pgh
and one from SF, and then using one half of each round trip ticket
saves you $375.

Note that for many airlines the discount fares depend solely on the
date of the first leg of the trip. The price does not vary no matter
when the return flight is (so long as you stay over a Saturday night).
You could buy a flight with one leg in March and the return in
November, and it would cost the same as if the return was in March.
For some of the lowest fares, however, there is now a 30-day maximum
stay. Staying more than 30 days often increases the fare by about 25%.
 
If you travel on offpeak hours and low volume days, the rates are
cheaper. Thus to guarrantee a low cost flight, you have to be very
flexible about where you are going, what time and day you are leaving,
and how long you want to stay. Offpeak hours typically include before
7am, between 10am and 2pm, and after 7pm, depending on the day of the week.

Also important is when you make the reservation. If you make the
reservation for an offpeak flight during the peak season (say, make a
reservation for February just before Thanksgiving), you may be charged
the peak rates. After the holidays some airlines lower their discount
fares to attract customers. So you may be able to get a better fare by
making your reservation right after the holidays.

If you notice that the fare for your flight has been lowered after you
bought the ticket, try calling the airline. Sometimes they will refund
the difference between the price you paid and the lower fare. (You may
have to go to the airport to get the ticket rewritten at the lower
fare.) You may have to pay a $35 to $50 reticketing fee to get the
refund, but some airlines have been known to waive the fee if you get
the money back in the form of a voucher (to be applied to future
travel) instead of cash.  For example, USAir will refund the
difference less a service charge, or give a travel voucher (credit)
for the difference with no service charge.

According to a Wall Street Journal article by James S. Hirsch, (July
30, 1993) many airlines now test fare increases by raising prices on
the weekend (Friday night through Sunday night). If other airlines
don't match the increases, the fares return to normal on Monday. So
you should be careful when purchasing tickets on the weekend. (This
works around the Justice Department consent decree that prevents
airlines from signalling proposed fare increases in the computer
reservation systems. When the competitors didn't match the increase, the
airlines would cancel the increase before it took effect. With the new
method, since it affects current prices, it technically isn't price-fixing.)

Hirsch also reported that many airlines have increased the $25 charge
for changing advanced purchase tickets to $30 or $35. Note that this
is often a minimum fee -- you'll probably have to pay the full
difference in price if the new ticket price is much higher. Airlines
are using these measures to discourage passengers from buying tickets
during a fare war and later changing the time of flight or
destination. If you go to one of the airline's ticket agents (not a
travel agent), some airlines will reissue a ticket at the lower fare
without fee if the difference is refunded in the form of a voucher for
future travel.

In addition to the Saturday night stay requirement, many airlines now
give additional discounts for travel midweek (usually Tuesday and
Wednesday, sometimes Thursday) when a Saturday night stay is involved.
Some also provide discounts for travel on Saturdays. Flights usually
aren't fully booked on these days.  For example, Northwest discount
coupons recently had this restriction.  Most leisure travelers like to
travel Sunday-Sunday, or at least not miss a large part of the week.
Business travelers, of course, don't like to stay over the weekend.

When making your reservation through an airline ticket agent or
through a travel agent, always ask for the lowest possible fare. Don't
just give them specific dates/times and ask them for a low fare --
tell them that your plans are flexible, and you'd like to know what
the low fare is. If you're too specific on the flight details, and
don't say that you're looking for the cheapest possible fare, you
might not get the best price. Sometimes by departing on a different
day, you can get a much cheaper fare.