The same strategy that BA had in 1946 when the government nationalised it and formed BOAC and BEA. According to history books, British Airways had "neglected" the European routes to such an extent, that British trade and industry was unable to prosper.

http://aerosociety.com/Assets/Docs/P...-50_Watson.pdf

Long haul routes have, and will continue to be, where the lucrative profits lie. Short haul and Domestic will always make a loss, as long as they continue to be used as "feeders" into the long hauls with ticket yields for say, FRA to JFK, being sold cheaper than LHR to JFK.

The strategy, I believe, is to show the short hauls and domestics losing money so that, given time, route frequencies can be reduced and the freed up slots used for new long haul routes. We saw this with the former Brymon Plymouth/Newquay, Inverness, Belfast, Leeds/Bradford and Isle of Man routes - we only have Belfast and Leeds/Bradford back again because of the bmi acquisition.

But we digress, back to Cabin Baggage........................