Separately I thought the reason SEN-CAX would possibly need a subsidy is that the recently upgraded rail line between London and Carlisle meant that flights would struggle to compete against trains
That's the whole point. There is an hourly rail service that takes 3 and a quarter hours and gets you to London and not the coast. By the time you add in a minimum check-in time, the one hour rail journey to and from London and the flying time there isn't going to be a great deal in it yet Stobart would like a nice little hand out for providing a link that is already duplicated by rail.
Also we are not talking about London - Paris here where rail competes with air as CAX has a population of just 71,000 and is surround by sheep and not people. Give it a go Stobart if you think it can make money but I suspect they know it can't make money thus the handout they are now requesting.