MOR, I think it's you who is taking the simplistic view.
It's very easy to say that a larger/newer aircraft is more efficient (and quite true). You are still missing the obviouse point that they will always cost more to aquire and insure.
I'm quite sure that Air NZ and Mount Cook would achieve better operating revenues with 737-800s, but it just aint gonna happen (not yet anyway).
Air NZ was I think the first conventional major airline to adopt a low cost model, and I think they employ some inovative management techniques. It is of course Air NZ management who really decideds what aircraft Air Nelson operate, and I'm sure that if they choose from 340s or ATRs it will be because these are the only viable options. I too would prefer to fly a CRJ or Q400, but be realistic. If the 'best I can manage' is a Saab or ATR, I will be quite content because at the end of the day, it's just a job.
If you really have some magic formula that puts the Q400 way out in front, I'm sure Air NZ would love to hear from you
