I think we have to look at this from a number of different perspectives and have a number of clear end strategies. The permutations and possibilities for the future of this route are fraught with difficulties and run much deeper than the arguments levelled at PIA.
From the point of view of LBA, is this a route that the airport wishes to continue? If so, a number of different outcomes should be explored - and explored quickly.
Of course, the best outcome for everyone is that PIA get a grip and the EU does not impose a ban on their European operations. In that eventuality, the future of the route can be considered to be more rosey and built upon. If PIA are indeed banned from European airspace, Pakistan suddenly becomes a very isolated place. As Michael rightly says, all of the capacity PIA provide from LHR, BHX, MAN, GLA, LBA etc etc cannot be taken up by Air Blue A319's. For political reasons, western airlines do not operate currently into Pakistan, so the traditional hubs such as LHR, CDG, FRA, AMS are also unable to help in this respect.
With that in mind, one has to look at the actual hub entry points to Pakistan. These are namely: Doha; Dubai; Abu Dhabi; Bahrain; Istanbul and Jeddah. Whilst the likes of LHR and MAN have a degree of service to these hubs, there would not necessarily be enough slack to take up the demand for travel between the UK and Pakistan. Qatar and Ethiad would probably see some form of uptake on their services out of MAN and could theoretically expand to larger aircraft providing more capacity but this would still not cover the full amount.
So, where do the LBA pax go? Some will find passage through other airports but, I suspect, some will not be able to travel. Alternative measures should be sought as a temporary or permanent replacement. This is why I have previously stated that this would be a good time to re-explore the Dubai option and, potentially, a Turkish option via Istanbul. If travel between the UK and Pakistan is necessary for people, additions of this variety would be a success based on the current level of service provided by PIA from LBA and might even just be the kicking off point for a daily Dubai as, inevitably, others would start using the service.
The key to any alternative service would be through the marketing of the route and connections. If marketed properly, there is no reason why it could not be a success.
So, to reply to Concorde Lover's post, I would advise caution. Obviously, the loss of airlines and routes to the LBA portfolio is disappointing and, wherever possible, we would want PIA to continue - with good level of service and with one eye towards improving the service in the medium to long term. However, if LBA does lose the airline, it is not sensible to sit back and say "good riddance to bad rubbish" as we are all worse off. However, if LBA is able to use the loss of PIA as a driver of change and growth for the better of everyone, it may just mean that losing PIA would not be felt quite as hard.