Hat,
DJ markets their Embraers to customers on a Jet schedule, which is a particularly important selling point on the long routes north of Brizzie through to Cairns where Qlink competes with the Q400.
When the 170's go, DJ will replace them wherever they can with 190 capacity in order to preserve the perceived 'Jet' appeal. This tactic will either work for them or eventually lose them even more money. Only time will tell.
Fixed costs for the ATR are not that much less than a 170, however, the ATR DOC's would be much less than the 170. So, where would the investors outside of DJ operate these aircraft for their business partner?
In NSW they could take over the Albury and Port Macquarie routes and be eaten alive by Qlink/REX and Qlink respectively as the 'Jet' speed appeal is now removed, and the competition comes down to ticket prices and frequency.
In Qld the ATR would not be an effective competitor against the Q400 on the long routes north of Brizzie due to the 60 to 100 KT speed advantage of the Q400.
Anyway, for the price of a single ATR, your 'investors' could buy 10 to 12 percent of REX shares on the market (trading this morning for around $1.14), force a seat on the REX Board and try to re-direct business activity in a way more favourable to their business partner!!
As REX is large, diversified and highly profitable, such a move would be seen as a much more sensible and secure way forward than speculating on the succcess or otherwise of start-up operations.
The Oracle