Yeah they are screwed in the long term without a direct viable Saab 340 replacement, all the replacement options are too big/expensive/require security screening and have no speed advantage over the Saab 340 although they would have a lower per-seat operating cost if they could be acquired cheaply. I'd be guessing that their current problems are more of a pilot shortage and/or engineering and spare parts.
It looks like they are going to lose the security screening battle with CASA so maybe getting in under security screening regs is now longer so important? I wonder if they ever considered the hundreds of ERJ140/145s parked out in the desert, the operating economics per hour aren't as good as the ATR42/Dash 8 but if they really are screwed for pilots as they say they, are then the speed advantage of second-hand ERJ-140/145s would surely mean that you could get more sectors in a day/more sectors out of each crew per day and possibly replace 3 or even 4 Saabs with 2 ERJ's on a frame by frame basis.
I'm thinking that the long-term plan is to get Fed and State subsidies or ACCC exemption for formalized monopoly routes high enough to continue flying a reduced Saab 340 fleet to places that are, and will be uneconomic for Qantas Dash-8s, or any alternative ATR operator to cover. Might be more of a state-by-state basis as some states (QLD, NSW and SA) are more affected by the potential loss of the Saab 340 fleet than other states. There would also be some gamesmanship of maintaining valuable slots at Mascot with the imminent arrival of the second SYD airport in that the regional aircraft slots can be leveraged to maintain larger Jet slots so they can argue that their ops all stay at Mascot and don't get banished to WSI.
