I think FR's press release will make life very much more uncomfortable for the govt; that the previous minister made what can clearly be interpreted as a commitment to the SNN-LHR route has to have some impact on the situation.
Of course, the govt's silence can be interpreted as their knowledge/suspicion that EI's objective is to obtain a better deal from the SAA, comparable to FR's. The govt must hope it is the case, because whatever the economic arguments, the idea that SNN-LHR can be stopped just to make way for BFS-LHR and the leasing of slots to Continental Airlines is not something the FF people will want to hear on the doorsteps; and don't think they will forget this easily ...
Likely outcome: the route will be kept on, albeit at a lower frequency; EI will get a better deal from the SAA, but the decision by EI will be portrayed as an FF victory by Dooley, Killeen etc.