You may have seen this article in the New York Times, which our very own Jason Ma was cited as one of the many people who bought peak Christmas airfare far in advance, thinking that prices would only go up. Jason booked a ticket from New York to LA for $649 round-trip and then the fare went down to around $539 on the same flights. Well, now we see Newark to LA on peak Christmas nonstops via Continental for $325 including tax. Ouch! Clearly, people are not traveling like they used to and the airlines are freeing up cheap seats at the last minute.
In fact, this fare is available on many dates besides the ones shown below, over Christmas week.
Sorry Jason, but you cannot really predict airafres. Sorry Farecast.com, too.
And here's another example from Continental.com (leaving Monday before Xmas, returning the Sunday after) from Newark to Miami on nonstop flights. You'd pay about this much, with taxes, during any time of the year, so it's remarkably low for peak Xmas week travel: