Capital Airlines did not go bust. Brown Group International the parent company did because of their troubled construction business and this brought down Capital.
After the reciever had finished, Capital had a trading surplus of £4m. This was even after the sale of Capital's assets to Knight Air at a knock down price. £800k was what was paid for the whole Capital LBA operation which included hangar, engines, parts and ground equipment. It was worth £m's more. The money went into the Group receivers pot due to financial cross guarantees.
LBA-BFS/BHD. Air UK had milked LBA/BFS pax for years. Capital came on the route, cut the fare, simplified ticket purchase rules (none) and took Air UK's pax. Capital were probalby the first low cost carrier in the UK, years ahead of their time.
FlyBe, or JEA as it was then, got a good route when Capital ceased operations, as did Loganair LBA-GLA and others.
Jim French knew the LBA-BHD/BFS market well, he was of course ex. Air UK.
As for Thompson, there would never have been a Capital Airlines or even an Air Wales today if he had not gone in there.
Brown Air, as it was then, were a shambles and losing £m's, Thompson turned it round and made it profitable. Air Wales were no different. In both cases the financial backer(s) were within weeks of ceasing operations due to the huge operating losses both airlines were experiencing under their current management.
As in any rescue operation, there are casualties, usually the existing management and some of the staff. This predictably happened at Brown Air/Capital and at Air Wales. Rescues are a difficult job and need fast and clinical action and Air Wales still flies today because of it.