Originally Posted by beckoa

OO operates on behalf of AS certain routes. AS does the marketing and sale of flights, and OO gets a set amount of $ to cover the expense of flying the route. Still earn full EQM/RDM, just no upgrades.

Basically they fly on thinner routes that AS wants to serve, but isn't making enough of a profit to keep mainline aircraft on, so they downgauge the aircraft. These are also routes that are not economically viable for the Q400 to run due to distance.