Three airlines may be too many, but as the Belfast / Glasgow market shows, two can be just fine. In that instance Easyjet use GLA-based aircraft and crew, FlyBe use a BHD-based aircraft and crew. Each airline has the crucial first flight out in the morning from their respective city.
Similarly BMIBaby and FlyBe may be competing airport to airport, but they are at least operating from opposite ends of the route. Adding Easyjet into the mix may upset things, however.