A PSO can actually be bad news at this time. The PSO covers the difference between the expected costs of running the service and the income. If your flight costs £2,000 to run and you have projected revenue of £1,800 then the PSO subsidy covers the difference of £200. If passenger numbers fall off a cliff, you still have the £2,000 running cost but revenue might drop (say) to £400. You still end up with the same £200 subsidy under the PSO but are now making a big loss to run a flight that you're legally obliged to run.
The Newquay-London PSO was really a mechanism to get the route freed up from £13 each way APD - which was the real benefit. A lot of UK routes would suddenly be viable if you lifted the burden of APD.