RR - the word sufficient means "enough for a particular purpose", so for a commercial company that purpose will generally be to make a profit.
You state that there was no shortage of passengers, but as 10 DME ARC says, there was an insufficient number i.e. they weren't paying enough.
If bmiBaby were filling the planes but operating at a loss, that will been because they couldn't sell seats at the higher price needed to make a profit - a seat sold for £10 loses less money than an empty seat.
If they couldn't generate sufficient income, of course they're going to try and reduce costs - how else you expect them to stay in business.
And as Beefer keeps asking, what did happen to the court case money?