It seems that many of the replies assume that BA is giving away a profitable route and the slots, when it gives up a route that subsequently is taken on by a franchise.
The franchise does not get the 'slot'- BA keeps all its slots! The franchise airline has to obtain these from the airport commitee, just like any other new airline.
Take MPL, for example. BA(EOG) aquired a profitable route from DanAir in 1992. Last year BA decided that MPL would be axed from their network as it was no longer profitable, and notified GB(at very short notice) that this route could be part of the franchise. GB did their sums, and decided that if it operated LGW NTS MPL in the winter, and direct LGW MPL and direct LGW NTS in the summer with the increased holiday traffic etc. the two routes would be profitable. They also had to take into account that Ryanair planned to start STN MPL this Spring as well.
BA customers in MPL, have now had continuity of service. They can continue to connect to other BA services at LGW (should there be any left next year). Ryanair will now have competition and are not going to have it all their own way on this route.
The way I see it, BA gains and GB gains - but GB of course is left with all the risks for the future.
BA presumably doesn't have the balance sheet to take the risks on this route. If their balance sheet deteriorates further they will be forced to shed marginal routes as well as the loss makers.