The increased range of destinations may well be a contributory factor for the decrease in the LHR traffic, but there are many others, not least of which are the fares charged by bmi. The shorter hours at the city also have an impact, I regularly have to return via BFS as the last flight to BHD doesn't suit my schedule, and I have met others who have to do the same.
It is only a matter of time before someone else provides competition on the only route in the bmi network that does not have competition, and I look forward to it.