Omnipresent, you make valid points.
My feeling is that with bmi the airline had no clear strategy and the result was that the travelling public were not sure was it domestic were was it specialising etc. The management were not entirely sure as in the uncertain times they operated in, the didnt manage to carve a niche out.
So to avoid a situation like that, I feel that Virgin needs to ensure that is is the airline of choice for point to point ex London, LHR and LGW. If their challenge the measured impact of losing domestic traffic, the solution may be in reducing some of the long haul routes to make way for other long haul routes and tap into bigger markets, hence not be reliant on feed to domestic routes that are marginal and make the operation complex as Omnipresent puts it.
EI-BUD