A deal was done to introduce the E175 into the fleet at NIL increase in operating costs, I will repeat that in plain English, the E175 costs the SAME as the Dash to operate, and it has 10 more seats to increase revenue with.
Your admission that the E175 burns more fuel pretty much ruins your argument as fuel costs are flexible - or has Embraer hedged the fuel costs on Flybe's behalf at a certain level for the next 20 years? The calculation that the costs of the Q400 are the same as the E175 must be based on a certain fuel price. So is today's fuel price the same as the one on which the pre-order calculations were based? If today's fuel costs are higher, logic would dictate that the overall costs of the E175 today are higher than those of the Q400.