Thumper, you beat me to it, I was just about to post this, under the title Willie Goes Surfing..
Before the deal to dispose of the so called “No strategic value to BA - Basket Case” airline BA Connect is sealed, Willie is putting 737’s on BA Connect’s former LGW - Newquay route.
Until about three years ago, BA connect operated a successful LGW Newquay service using efficient Dash 8’s (It used to be a Bymon service into LHR until BA borrowed the LHR slots). BA Connect pulled off the route claiming significant losses as the reason. The routes along with much support went to Sutton Harbour (Air Southwest). So BA dumps an arguably unprofitable operation, gives it away to another operator who in BA’s view could make a better job of it. Three years later, it goes head to head with that new operator using airframes with three times the capacity.
Still, BA Connect's MD told us we were making substantial losses on this operation, so it must be true. 
Now that BA have had time to study Flybe and its business plans in depth, will they do the same to them after a short period of grace?