Worrying about the tarnished image of the brand I think over estimates the discernment and memory of the travelling public. If the new Flybe goes from where they are, to where they want to go, at a price that's competitive with any alternative way of travelling, then most people will still book.
The high profile collapse in the media was probably one of the best things that happened to the brand profile (I'm talking about the brand profile here - I'm obviously not glad Flybe collapsed). Any ex flybe employee outside EXT can tell you stories of how dismally invisible the brand was prior to the collapse.
Mine: I had permission to do occasional days work in my pre flying job. One day working with a young lady she asks if I just do that job on an ad-hoc basis, I say yes but its not my main job.
Her; Oh what do you do.
Me; Im a pilot.
Her; Oh wow, who do you fly for?
Me; Flybe
A look of bank incomprehension crossed her face before she said; Oh I don't think Ive heard of them. This conversation took place in the Somerset town of Street - not exactly a million miles from Exeter.
Since the collapse I've noticed that if I do mention Flybe a great deal more people seem to at least have heard the name. Its about brand recognition and as the old saying goes; "There's no such thing as bad publicity".