I read it differently, that BA had wanted to do a summer LHR-NQY service without subsidy on a commercial basis. This would be alongside, rather than instead of, the PSO but as the route is "closed" due to the PSO, they could not do so. Whether BA would bid for a year-round LHR-NQY with subsidy is a different question that I don't believe has yet been answered - perhaps even by them.