Waiting until the last minute might be the best way to score airfare deals

Oil prices are plummeting and the number of travelers taking to the skies is dropping in the face of a worldwide recession, so how come airfares aren’t any cheaper? Are we really headed for a world where only the wealthy can afford to fly?

The answer is a bit complicated, but as the LA Times points out, last-minute deals for holiday travel are starting to pop up, which is good news.

Part of the reason airfare hasn’t plummeted with the price of gasoline is that airlines mainly buy gas on the future’s market, which means they’re somewhat locked in to whatever price they paid (if you take into account fuel “diff swaps” things get much more complicated, but the result is that airlines aren’t yet seeing the full benefit of reduced oil prices). The other, more cynical, answer is that the airlines are trying to milk the high prices for as long as they can.

But now there are a host of deals available for those looking to go somewhere for the holidays.

Last minute deals? On airfare? Yes, it’s true. And the larger takeaway from the LA Times piece is that the golden rule of airfares — buy early, save money — might not be true anymore, which is good news for those of us that like the flexibility of last minute travel.

It’s too early to say for sure that buying plane tickets in advance is no longer a good strategy, but there are a couple of ways you can hedge your bets now. First of all check out Farecast, the price prediction engine to get some historical perspective on what your route normally costs.

Turmoil in the economy and strange fluctuations in airfare could prove problematic for Farecast’s prediction engine, but at least you can still get an idea of what a good deal was in the past and compare it to current prices.

Another handy tool is Yapta which will track the price of your route after you buy your ticket. If the price goes down most airlines have an oft-overlooked clause in the fare rules that could entitle you to a refund. Unfortunately some airlines will charge “service fee” for processing the refund — depending on the amount you stand to save and price of the fee this may or may not be worth it. However, even if you don’t end up with a refund, Yapta is an easy way to see what would have happened if you wanted until the last minute to buy your ticket — handy to know for the next time around.

[Photo Credit, The Wu’s Photo Land, Flickr]