Yes, you are quite correct and I often thought that was the reason prices were sometimes very high in the past compared with their other Jersey routes, it was really a pseudo schedule. Maybe they could not undercut costs charged to the client, however I cannot see why that would stop them expanding the route next year, or from when the contract ended. Now it would appear too late and presumably Travelsmith's passengers will fly with Easyjet in future.
It is a shame to see Flybe leave Southend, if that is now their intention. There has to be more to it. I still have no doubt that they will lose Gatwick passengers to Southend, I know a number of people who live in Southend and are forced to use Flybe Gatwick, they are overjoyed at the news.