Guys, you've got to respect them for what they have done. I am certain there are dozens of ppruners dying to write "I told you so" posts but, at the end of the day, they have admitted they misread either the market or their capabilities (or both) and come clean.
The main concern now is that they will be seen as a weakened airline and others will capitalise on this - operating two a day on London City is only partially serving this market, leaving Stanstead uncovered is inviting more London competition and, as a result of their Galway expedition, they now have a competitor on their back on Liverpool.
There are lots of patches to be applied but, if they concentrate on what they can be good at and put 100% into it, with proper direction, there is no reason for them to cease and every reason for them to flourish over time, provided the finances are in place.