Is there any evidence to suggest that they are?
You mean evidence other than CityFlyer ordering 15 brand new aircraft, starting their own MPL cadet scheme and a 41% increase in PAX numbers last year despite the reccession? I predict they are doing ok.
When Flybe acquired BA Connect, did BA decide to hold onto LCY or Flybe refuse to take it (eg, not fitting with their overall buissiness model)?