Can't see T1 being closed within the next decade, so they will have to spend some pennies on it.
As Ozzy says, basic stuff is being ignored throughout the whole estate. Walkways, escalators, toilet doors, PIDs in the bus station. scruffy dirty food outlets (lack of cleaners), no soap in dispensers etc etc.
No wonder so many of the shiny new check ins in T2 are not being used if the baggage system cant cope.
As for domestics, an interim could be done in the T1 downstairs check in. Moving Aurigny, Eastern, Loganair, BA, easyJet (doms) Aer Lingus (Eire & NI) to one place & it would have its own security channel. Surely a minimum cost solution. Sort out the T2 baggage issues & get Jet 2 back to T2 in full.
The check in queues & associated bad press has killed the domestics, especially Eastern on the Southampton. From the Flybe 6 a day, we now have Eastern advertising twice daily AT72 but in reality it is often downgraded to a once daily Jetstream & even that is often cancelled. The competition is a 4.5 hour train journey, costing around £75-£100 each way standard class (unless you book weeks/ months in advance). A 40 minute flight for the same price as a cross country packed train should be a winner, but who would want to endure the current airport experience mixed in with thousands of Ryanair leisure pax arriving sometimes 4 hours before their flights. The pax (inc me) have given up trying to fly to Southampton anymore.