Whilst it is a little irritating to lose free domestic flights for European destinations in practice they were of little use to me flying out of MAN, as there are usually plenty of other options direct. It always seemed like a waste of effort to fly MAN-PMI via LHR and taking c6 hours rather than 2 direct.
I haven't seen any mention of being able to use other carriers for flights from domestic to European destinations. In particular FlyBe and Monarch will be very useful for me from MAN, always assuming I can find availability of course.