Why is is it that only having 4 airlines serving Fraggle is "depressing". It's not exactly the hugest market and the routes need to be able to pay their way. If there are more airlines, noone makes any money doing the routes as they're all trying to cut each other's throats. Witness the way things went a year or so after BA bought Manx, and then once they dispensed with the ATPs.
Massive undercutting isn't normally associated with an overall improvement in service standards or safety.
Better that the route structure is stable than crowded.
Spanner