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is this correct or am I looking at the wrong sites?
in the past, i've looked one day at one price, the next day the same flight has cost more, the next day it has cost less. it is all because they base their prices based on expectation of demand, so if a few people buy tickets very early it can have a noticeable impact on the cost.
but really, it is best not to think about it too much. decide when you want to go and how much you can spend. find the best deal within your dates (bear in mind that it is best (in terms of comfort and jetlag) to fly back overnight and to fly out there mid-afternoon and that it is good to fly with an airline that still does free alcohol (eg, not american airlines)) and then decide if it is a reasonable price. if it is, book it and forget about flights, because looking for the best deal possible will kill you.
for what its worth, you should be able to get return flights for under £500. anything under £350 is a good deal.
it looks like the £350-£400 return flights are pretty standard no matter what date you book for
i mean, they basically have a price that they sell flights at, because they have fairly known costs: fuel, staff, landing slots etc etc. the only reason you get fluctuation is because of demand; selling them for less if they anticipate not selling many tickets (but very very very rarely less at short notice because business travellers will pay loads for short notice tickets), selling them for more if they anticipate high demand.
It's not just about booking early. Sometimes airlines have special offers even just a few weeks before the flight, if they have lots of spare seats. The prices also change depending on the day you book your tickets. It's usually cheaper to book them midweek than at the weekends. Kayak.co.uk has charts which are pretty handy for spotting the trend of the ticket prices.
i paid 190 quid two weeks before the flight last year... wouldn't pay over 300 quid personally.