No, it is not so much about the current meltdown of the economy but more about the long-term development that traditional markets for LCY are becoming unsustainable and marginal markets (because of the high costs associated with LCY) are increasingly unable to sustain a route over a longer period.
Domestic routes come under pressure because of the trains, and so do destinations in Belgium, France and the Netherlands. And the number of potential destinations outside that perimeter is somewhat limited as most of them are so far away that (at least at the moment) the smallest aicraft that can be used is an 80 seater - which is too big for many markets (OSL, TXL, WAW or FCO might have worked with a smaller aircraft, for example). So it will be interesting to see if LCY reaches a bit of a saturation point for its premium product as far as additional destinations are concerned (FRA, ZRH and the lke will always work because, of course)