It's a bold move all right. The problem is that air services have always been a bit like the chicken and egg situation. Need the traffic to justify the larger planes. Without the larger planes, the fares are too high to generate the traffic and the flight attractiveness is too low to switch many people across to air.
The F100 flights are a leap of faith and I for one hope they succeed. And despite my free market leanings, I think this is one time when it is a big 'well done' to the monopoly licensing system that the WA government has applied on thin routes. This gives the sort of financial stability that makes this type of initiative possible. On the busy routes, where the traffic can support several operators, the WA government has opened up competition, which makes clear economic sense and gladdens my free market heart. But for the rest of WA, I'm with GT on this one
I think given all the parameters relating to WA's vast distances and small population the government has got it right in trying to build a viable and sustainable airline system