Luxair would presumably be looking to cater for the "gap" in the market resulting from BA moving its London-Luxembourg flights to LHR; so my guess is that any LGW flights would be additional to the LCY operation. All that said, LGW Management tend not to be too excited by the prospect of additional small capacity regional props/jets coming into LGW at peak times so it would be interesting to see if Luxair actually manage to find themselves any slots.