If the marketing is done properly & the pricing is good,there may well be enough people willing to part with some $$ whereas now the regional residents know theres no point in even looking for an attractive airfare & instead jump in their car.
If the public benefit,they will respond by buying the tickets & in turn it is providing jobs to some who thought maybe their flying days were over.
All been done before, on leisure routes without commuters to the state capitals you will attract seasonal $50 fares, but nothing that will turn into profits. Marketing costs money, a lot of it, good luck if they can get it right without the big $$ spend, but it's very unlikely. JetGo proved you could fill seats and still go broke, why, because Australian regional routes do not pay enough to support jet economics, there is no scale to get the fares off the basic cheap ones to profitable margins. Virgin could not make money on Mildura-Melbourne with good loads, wrong aircraft for the route. This seems like a punt at the TAB with mates about whether something can be done with no actual research behind it. This just looks like JetGo on steroids, bigger planes, bigger losses, some directors will make some cash, the rest will fall in a heap.
PS if people are that worried about the welfare of some pilots and other airline staff, donate the millions that will be wasted on this endeavor directly to them. Divided it will be more than any staff member will earn from this mob.