It's nothing to do with BHX specifically, AI have been in financial dire straits for ages, so it could be that the 'valuable slots' at LHR have been sold off or leased out longterm.
At LHR, they used do several daily flights to/from Bombay, with one extended to New York, plus a daily to/from Delhi, and at one time, even direct to Calcutta. Now it's just one flight/day each to/from BOM and DEL!
It's not just BHX, AI has withdrawn from most of Europe, most of Africa and the Mideast, all of Australia, and much of Asia. Only the Gulf appears to be a growth area for them. That once great airline is a shadow of its former self.
Quite simply, they are suffering from bankruptcy? That seems to be the state Kingfisher is also in. As far as Indian carriers go, it seems Jet Airways is the only one which are operating smoothly.
They've started on that Monarch hangar:
BBC News - Monarch starts Birmingham Airport hangar construction
Expected to be operational by the end of the year.