Airlines are not in the habit of setting up routes that they know will fail just to prove a point - it doesn't provide as good (if any) a return as if the aircraft had been used for a different route that the airline suspected had potential. In other words, BA DOES think these routes will be profitable.
If they didn't, they WOULDN'T be operating them.
I don't mean to judge, and I accept I may be wrong, but the response of "BA are setting up these routes, knowing that they'll fail, so they can turn around and say there's no demand from the regions" from certain members of this forum is quite amusing/hypocritical when those same members a few months ago were as excited as a kid on Christmas morning with the prospect of BA operating from BHX again. The flights haven't even started yet! Let them operate first and then see how they perform!
As has been said before, BACF have set up these routes to make use of aircraft that would otherwise be parked at LCY doing nothing.
Why now?
Consider until the last couple of years most airports across the UK were still struggling to recover from the recession. Aircraft only make money when they are flying, so BA wanting to fully utilize their LCY fleet during LCY closed hours is hardly new, but I imagine that regional airports recent growth has focused their attention on what to do with that fleet.
Its probably just talk from Willie Walsh, but before LCY was given the green light for expansion, WW threatened to pull out of LCY if they increased airport charges too much to cover expansion costs. LCY have now been given approval to expand. Do I think BACF will pull out of LCY? Of course not. However if through operating these flights BACF know that they can operate profitably from the regions, their threat of pulling out of or reducing flights to LCY suddenly becomes a realistic bargaining chip. Certainly enough to make LCY management think twice about pushing BACF.
Another point to consider (though more applicable to BA in general and not these BACF flights in particular) is that BA's main operations currently are at Heathrow, Gatwick and City - which are all pretty much full or will be over the next few years. That presents very little room for growth for BA. Consider that any new runway in the SE isn't going to be operational for at least a decade, and I would be very surprised if BA weren't looking at other possible means of growth. That doesn't necessarily mean a full on return of BA to the regions, but I wouldn't be surprised if in 5 years BA had some presence in the regions (beyond their current BACF offering).
Consider 5 years ago the idea of BA operating from the regions was shot down in flames, yet now (or soon will) we have BACF operating from MAN, BHX, BRS (and GLA & EDI?), and BA's tone of long haul from MAN has changed from "never" to "not in the immediate future" to WW stating "low cost long haul will become a significant part of IAG" across Europe. In that context, the idea of BA operating a selection of routes from the regions in 5 years or so doesn't seem so unlikely.
I don't think these BACF flights are BA "testing the water" for mainline operations - it is purely about fleet utilization - however I would be very surprised if BA weren't considering operating from the regions in some form again, and as frustrating as it is to admit it, that is likely to come to Manchester before it comes to Birmingham.
Why not use A319s or A320s from the LGW fleet,as they will be configured towards leisure routes better than the ERJs.
Because the A319s/A320s are fully utilized as it is. BA are looking for something for their ERJ's to do. It doesn't matter what aircraft is better suited to these routes - these flights are about getting maximum use of their ERJ fleet.