It will be interesting to see how this goes.
The fares will put off a lot of people, but if there's one route that could possibly sustain itself from point-to-point business passengers that is it.
Against that, it was said that when Jetmagic tried it that business passengers wouldn't move away from Aer Lingus because of frequent flyer programs and the like (not that Gold Circle is good for anything other than earning lounge access).
The other advantage for a new entrant is that it's not a route that Ryanair can impact by dumping capacity or cheap fares onto it. They can't fly into LCY and any passenger who is choosing the route isn't price-sensitive anyway.