There is no reason why LDY cannot sustain both ALC and AGP.
Now as regards ALC, they have built a massive new terminal 3 which is twice the size of terminal 1 and terminal 2 put together. It has 96 check in desks and about 50 gates.
They cannot afford to lose the likes of Ryanair but the new terminal has a bit of the marble palace about it so despised by Michael O'Leary which may explain why they are having to increasse charges etc to pay for it.
Nevertheless they do need to find an amicable resolution.