Thing is that the changes required at BA are so radical that our postulation is likley to be entirely hypothetical.
If you are correct about cost wins all then BA have been operating the wrong business model for the past 20 years - and still talk about Premium and quality. If cost is the only driver for the consumer then BA need even more radical re-organistion as their margin will continually be eroded by those with a much lower overheads.
It's easy to postulate that cost is everything when discretionary expenditire is under pressure but I belive there are other factors which are of importance to customers. Relative Cost, Quality of service experience, environmental and ethical considerations are all pertinent to aviation and, I would suggest that cost considerations alone will not endure beyond this current recession.
If BA adopt the low cost, no frills model then they will be leaving a market which they have dominated for years for one in which they have never been successful because of their structure and corporate mentality. However, if they adopt a predatory strategy , slash unprofitable routes and target profitable routes with additional capacity leading to a price war between operators - it might work. BA will hog slots to assist this strategy and allow future diversification - can't see competition commission wanting to get emboiled with this given the mess they made with BAA!
Interesting times but,despite the potential value in their brand, I still think that BA are on the way out.