I wrote the article on Gibraltar airport in the current Airports of the World magazine after a visit and talking to some people "in the know" about what's going on there.
There's great potential for flights from Gibraltar both within Spain and to elsewhere in Europe. The Spanish towns around the Bay (La Linea, Algeciras etc) would welcome this, as it would save a long drive to Malaga. Gibraltar would also boom as an alternative entry point to the Costa del Sol.
But the Spanish government will not allow flights to the airport from anywhere in the EU (excluding the UK) unless the British allow joint control of the airport. It's these talks that are taking place now, and sadly may see Spain getting their own way.
The other contributing factor to the small number of operators at Gibraltar is the pricing put in place by the MOD (who run the airport) - which are 5 times higher than at Malaga. Ryanair have already said they'd like to fly there, but not at those prices.