"Keep the 320s and 319s at LHR and provide a proper service: not no frills, but meals, drinks, proper C Class seats and service even with drinks and snacks / meals in Y."
I agree with Slim.
I know this has been covered and some people think it is a bad idea, however have a look at this Air Canada product.
Photos: Airbus A319-114 Aircraft Pictures | Airliners.net
A319 - 14C/106Y
A320 - 20C/120Y
A321 - 20C/154Y
Width/Pitch in C = 21/37-39
Width/Pitch in Y = 17/31-32
Surely these configs provide more than enough capacity for BMI to provide enough seats and a decent product.
I don't see any point in pursuing lower fares, that market is flooded. Instead BMI should look to the future and be in a strong position for when people start to look for a quality product again. These configs would give a decent number of Y seats but also provide quality C seats for business travellers who will pay extra for a nice seat.
Nice seats in C are also a nice perk for upgrading valued customers to if they are going to be empty anyway. Too many times when DO/T/Y were in fixed config C, I saw those seats empty. It is bad for the companies image when the Y pax walk past an empty C cabin. Most of the flights I was on had plenty of Gold/Silver Diamond Club members on board who could have been moved.
Now that most of Star are in T1, BMI should be providing a decent business service for those connecting to Long Haul with other Star members. Hopefully the LH guys will have a serious look at the onboard product.