Austro07. The economics of the Q400 speaks for itself. It breaks even at about 28 seats. Granted this is at a higher fare of around £50 per sector but Flybe do not need to have the 80% load factors that other low costs require to maintain a significant competitive advantage.
As for Flybe having no idea of how to serve an island community from Exeter, I would suggest you take a look at both Jersey and Guernsey where Flybe have been the largest carrier for the past 10yrs in their various guises. I think you'll find that there is no airline in the UK that more supports and serves the needs of an island community better than Flybe!