I think upgraded planes make a fairly significant difference to a passengers choice when flying long haul, even if its not the case with short haul. This may encourage them to choose VS again even if they are not the cheapest option. Thompson have had great feedback from their long haul product ever since it was upgraded a few years ago so I don't see how the same can't happen for VS's beach fleet. Its also worth noting that Thomson are also very competitively priced and often cheaper than BA/VS, even if they do not offer the same flexibility and frequencies.
Also, as for alternative options for LGW/MAN/GLA you have:
British Airways
Thomson Airways
Monarch
Thomas Cook
So there is plenty of competition on the long haul leisure routes although I do realize all of the above airlines do not aim themselves at the same type of customer.