I don't think the time argument is particularly relevant on short sectors like EDI-LCY, as previously stated, probably all of 8 minutes difference. Seat pitch on Q400 is fine however the noise levels are significantly higher than ERJ. flybe may be able to offer cheaper fares than Cityflyer however if you are travelling at your company's expense and using a lounge you prabably are going to already have your favourite. BHD LCY has been run several times before and has been canned each time for poor performance (flybe approx 2004, euromanx approx (via IOM?) 2008, and Cityjet/Suckling approx 2009).
What may sway it is whether flybe have bagged some big corporate contracts. In any case, I would expect Cityflyer will be working to ensure flybe don't get too good a foothold in their key market.
sr