BA will not, and should not, dispose of short-haul. The old BOAC model has been looked at before and short-haul is vital for feeding long-haul and BA claims there is an optimum balance of about 1/3rd long-haul and 2/3rd short-haul at LHR.
When BA was really going through the wringer a few years ago, I'd actually credit management with not going for drastic/panic measures like divesting parts of the airline.
And don't forget, IAG has the LCC market already covered through its subsidiary Vueling.
Personally, I'm cautiously optimistic about BA's future. Its prospects are certainly greater than the other European legacy carriers, not least because its O&D market in London is so big.
Lufthansa's track record is very patchy (see the disaster with bmi and failed ventures like LH Italia) and AF-KLM seems culturally incapable of getting to grips with major structural problems.
And arguably, the real story in UK aviation is the wildly divergent financial performance of BA and Virgin Atlantic. BA is forecast to make an operating profit of over £1bn this year whereas Virgin expects to be at about break even.
Finally, the "pension fund with wings" moniker was true about five years ago but there's been a lot of progress in bringing the deficit down.