I did my Master's Degree thesis on the introduction of small regional jets into BA which included looking at the cost base and culture. It decided that they really needed to separate the whole RJ operation off, otherwise it would be loaded with LHR costs, Head Office overhead etc and would never be able to compete. This was in 1991, long before LoCos became a thing. BA flips and flops between making LGW a core site with lots of "waves" of shorthaul feeding longhaul and dropping the whole base because it doesn't make money. I doubt the accounting principles have improved much since my day when shorthaul was loaded with extra costs due to the absorbtion costing method where overheads were added per landing, not per flying hour, making Long Haul seem to be immensely profitable. Short Haul flights were sold in bulk at cheap rates to feed longhaul too.
Of course BA had a proper LoCo in Go!, run by Barbara Cassani, but sold it off to its management and then they sold it for a profit to EasyJet. Typical BA corporate decision making.