There is a demand for London > NQY though.
I personally rode the 0720 up 37 times last year and can vouch for decent load factors.
I think more of an issue is management. The loss of ATC on mil handover, the passenger departure levy, etc.
I can't help but think if this was handed over to BAA or the like we would stand more of a fighting chance.
The airport in it's entirety as a resource should be able to be commercially viable and is increasingly so with the re-location of AW, the air ambulance, Coventry museum etc.
Scrap the departure tax, offer some decent incentives for the low cost carriers and the odd benidorm charter.....