I think that when the Q400 is substituted for the E145 the lower operating cost will lead to lower fares from Flybe.
LH are very predatory as an airline (remember GO on STNFRA) and have to be treated with care. They are the sort of airline who don't mind competition but they will try to stamp on anyone who invades their market share by too much. The E145's will soon be off and infact, the Q400 on the BHXDUS route has helped to increase pax figures on that route with no real drop that some fighting the jet/prop argument would have predicted.
There is also a big difference between LoCo-Operation in Germany and UK. In Germany the starting price all inc. is
below the fees and taxes, which are imposed by airports. So they subsidize the fees to a certain amount.
Eg. Tuifly has a starting fare of 19,99€, Germanwings of 19€, which is ex UK at 14,99 GbP. I have never seen Flybe offering such fares ex MAN to FRA or DUS.