Bijave - we agree on something! The TGV is a huge competitor, for all the reasons you say - so is the BMW up to a certain leg length.
The problem for the established big carriers in an attrition war, which this is, is that they don't have a genuine low cost structure. The low cost boys do.
So I reckon that unless the coffers are full over at BA, Air France and DLH, the cheapies will win the day. Or could it be that the big boys have picked a good time - just as Ryan and easy have committed to buying a huge amount of aircraft?