Actually, VIR's new LHR-MAN service makes total sense. In the current tough economic climate the airline (like many others) is enduring painful losses. But it is very difficult for the company to pare back its exclusively long haul LHR portfolio without risking the loss of valuable slots under the 'use-them-or-lose-them' rules.
The launch of LHR-MAN using three daily slot pairs sourced from the in-house pool protects those slots for the long term. VIR can shelve three daily long-haul loss-makers until economic conditions improve. Those long haul services are much more expensive to run than a (very) short haul A319 service which at least contributes valuable traffic feed to support the bottom line in the meantime.
In due course, VIR have the flexibility to reallocate those slots to long haul services as economic conditions improve. And, if in the meantime VIR decides that LHR-MAN (and subsequent short haul ops) are sufficiently compelling, they can seek to build up their LHR slot portfolio to accommodate them for the long term. Certain routes (not MAN) should attract slot awards from the BAW pool under the terms of the BMI takeover.
Having a mix of short and long haul services does allow a carrier to limit losses under the LHR slot system by overweighting short flights (pseudo "slot-sitters") during tough times and long haul flights when the economy can support enhanced capacity. In the meantime, routes such as LHR-MAN provide feed to the long haul programme, contribute at least something to the bottom line, occupy must-use slots pending improved economic conditions, and protect the brand. It is a win-win for Virgin.