This is a mess. I wonder if someone is working in a back room to work out which routes deserve a PSO and which can be considered vital to the economy. These can then be saved by a pre pack and the rest allowed to go. No doubt the consortium would also like to get their hands some LHR slots and will ask to hang on for that.
It isn't all Flybe's fault. Many regional routes from Birmingham for example have been tied by a succession of airlines and none have really been able to make them work - British Midland, BA, Brymon, Maersk spring to mind. The market is not large enough for a loco flying 737s/airbuses, and it is difficult to sustain a premium business service