I tend to start fare watching about 6 months ahead. You never know what fares will do, or if the flights you really want will book up. When we went in November, I was watching fares when suddenly, one day in July fares had dropped from $230 to $167. So I booked.
Now in the Post 9/11 cutbacks, my flights vanished. But I kept an eye out, and when I saw them vanish, I called the airline, and had them change the flights they had rebooked me on.
Some airline websites are really good for this. At delta.com, you can check the availability of seats on the flights. That helps you decide whether to wait for a lower fare, or risk being on the 11:30PM flight...
Bankruptcy is an additional twist...