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By THIS IS MONEY
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• Despite the initial euphoria, analyst Peter Harbison said the crunch will come by the third quarter next year, when a year of cut-price fares added to the rising price of fuel should force consolidation or even unlikely co-operation.

Already Virgin Blue estimates the rising oil price has added between A$5 to A$10 to the price of one-way tickets it is selling for as low as A$48.

'There just isn't enough room for four fairly aggressive operators on the same routes,' said Harbison.

So far, the four carriers are competing only on the Brisbane to Sydney route, but as Virgin Blue expands the clashes will come. That is when Australia's air war will finally get serious and the real damage will start to show.

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