I have posted my solution i.e. update airport utility software. Ocourse you needa working internet connection for that!
I have a 27 inch imac, mac book pro, mac book pro with retina display, iphone 4, iphone 4s, 2 x iphone 5. Each device was showing erratic internet connections at some point in time or the other.
I just updated Airport Utility Software. You can find it in Applications/Utilities. When you click on Airport utilities, it opens a window with 2 icons. The bottom icon will look like your airport express. click on that and then you will get info on the right. If , I repeat if, your Airport utility software requires updation, you will be prompted in the info box. Click that and then you will be fine.
However, the irony is that you need an internet connection for this. I set up a hot spot on my phone and did it.