Perhaps Loganair could operate the route as a flybe franchise as Saab 340 or 2000 rather than Dash 8. I don't know about their aircraft availability but would suspect Waterford would have approached them.
The idea of linking air and rail services sounds appealing except it would mean a change in marketing strategy for flybe who currently quote "faster than road or rail" on their aircraft. But this type of innovation could be interesting.