I know that we've lost 400,000, largely O&D passengers to London since 2007. I also know that London City is under 15 minutes from Canary Wharf on the DLR, you can double that (and a bit more) from Kings Cross and it takes longer to get to Canary Wharf from Heathrow than it does to fly from Newcastle. There is also the fact that having flights into London City would give BA a competitive advantage over Virgin with the business community
Another thing I know is that Newcastle is right on the awkward threshold that still makes the train really competitive, whereas the plane has the edge from Edinburgh/Glasgow due to distance and the time taken.
The bits I don't know are where they would get the slots or spare aircraft. But I'll hazard a guess that when the upgrades are finished at LCY things will look a little more flexible. And i'm sure Eastern would always be happy to lease in another aircraft to BA if they wanted/needed it