Long story short, buy your tickets two months in advance and brace yourself for lousy schedules.
A recent statistical study found that the most expensive day to buy a ticket is one day before the flight and the second most expensive is the day of the flight while the cheapest time to buy a ticket is about six weeks out. But that’s based on averages. Your flight might not be average.
On any given flight, there are some cheap seats which will be sold first and then the remaining seats get more and more expensive when there are fewer and fewer seats left. If you wait until the day before the flight to buy your ticket and you get the very last seat, you’ll end up paying a LOT more money than if you’d bought your ticket six weeks in advance.
But there are exceptions to that rule. If the tickets aren’t selling, the airline will DROP the prices in order to encourage more people to take that flight. They really want the plane to be full.
So, you have to figure out whether the flight you’ll be on is one of those cases where demand is high or where demand is low. If demand is high then you should book your ticket as far in advance as you possibly can. Eight months out is not unheard of. If demand is low, you’re better off waiting until four weeks before the flight in order to get the maximum discount.
Unfortunately, you can’t know for sure if your flight is high demand or low demand. So if you buy your ticket six to twelve weeks out, you’re probably okay.
But you also should remember that the cheapest tickets are NON REFUNDABLE. For example, if you buy tickets eight months in advance of a rock concert, and then they change the date of the concert six months out, then you’re stuck with a ticket on the wrong day. The good news is that when they say “non refundable”, what they really mean is that you’ll pay a huge penalty when you ask for a refund. So if you paid $375 for a round-trip ticket and then ask for a refund, the penalty might be $200 and you only get $175 back.
The other thing that affects the price is the convenience factor. The airline might schedule five flights a day on the same route, and the ones that leave at a reasonable time and arrive at a reasonable time will be the most expensive. The cheap ones will require that you get up at 3 AM to drive to the airport, or even worse they’ll have you depart at night and arrive the next morning, having gotten very little sleep–that’s called a “red eye”. So you have to decide what’s more important to you, saving money or having a schedule that won’t turn you into a zombie. The cheaper the ticket, the less comfortable you’ll be.
I highly recommend http://matrix.itasoftware.com/ for finding flights.