Forgive my ignorance here but the few times I have done a MAN-LHR-MAN run the plane has been very empty.

Maybe it does make sense to chop the number of flights per day on this route?

In contrast I had a BD flight cancelled MAN-LHR one evening and as I was on a full Y ticket instead of being moved onto the last flight of the day I got endorsed onto BA.

The BA flight had about 1 empty seat.

So, if BA can have packed planes on this route why can't BD?

Ok, I've not sampled every scheduled departure time to/from MAN/LHR so maybe all the other flights are full.