Firstly, 'PROMETHEUS' and 'ALIEN Covenant's biggest problem was their truncated running time. Despite other issues these movies may have, the theatrical releases cut too much content from them. When fan edits are better than original release that not only indicates a problem exists - but it can be solved. I am still hoping one day 2oth Century Studios will release more complete versions of both of these movies to home media. I think it's inevitable. Audiences can cope with a longer run time. The idea of 3 hour long movies isn't new and audiences will go see them if the movie is worth the additional running length. Can 3hour movies be profitable? Isn't 'Titanic' 3 hours long? I think that movie did well for itself; as did all the 'Lord of the Rings' adventures.
Secondly, the main problems these movies have could have been solved with better dialogue. Much of dialog in 'PROMETHEUS' middle act is dreadful at best. It needed some serious script doctoring to make Fifield and Millburn credible. These two characters needed a complete makeover. Retain the plot line as that was fine in both movies. 'ALIEN Covenant' had much better dialogue but there were definitely some wasted moments. One that comes to mind was the descent of Lander One onto the surface. Instead of dick and tit jokes, one of the characters could have read out results from atmospheric readings stating. "Yep. Just as the descent drone recorded. Nitrogen, 78%. Oxygen, 21%. Argon, 1%. Trace amounts of other elements. No readings on any hazardous microscopic organisms hazardous to humans." Simple really. Dialogue of that nature would solve a lot of that movie's biggest criticisms. Nope, instead we get "Sugar dick" gags. smh.
Thirdly, a retcon is 100% out of the question. If you want to appease most fans then all extant movies must somehow be honoured. There are a lot of 'ALIEN3' and 'Resurrection' fans out there. They would also have to be considered if you want to appease all the fans. So this is definitely going to be tricky. Personally, I think it can be done. Taking the first 2 criteria above into account a decent story that connects the prequels to ALIEN' is possible. It will need to explain the connection between the Engineers and the Space Jockey. It will need to make use of the enticing ending of 'ALIEN Covenant' in a meaningful way - what is David's intention with the implied army of Aliens he is about to create? I don't think he's heading to Origae 6, that's for sure. What use would David have with his army on an uncolonised world? No. He's heading to a human settlement, that's for sure.
With this in mind, the set up for a massive conflict between colonial forces and thousands of Aliens is definitely implied. We need a big combat movie in the series now. It's been way too long since 'ALIENS' hit the big screen. Satisfy the audience with a sprawling action epic between Humans and Aliens and half the work is over. From this point onwards, you're just filling the gaps.
At some point, the Engineers will have to re-enter the story. There's too many trailing leads remaining to not address these important characters in a much greater story. Eventually, they must catch up to David - and there's another struggle to be resolved. I'd have David engage in dialogue with one of them. Violence isn't his preferred method of engagement - politics is. So, he would trick an Engineer into leaving a defeated colony world. The Engineers can have the survivors. The Engineer and David make a pact he can have the planet - but never leave it. Little would the Engineer realise he has been infected.
The Engineer leave David's new world with the colonial survivors aboard his vessel, with the intention of taking them to an undisclosed destination. During the flight, an Alien erupts from the Engineer and the ship crashes on LV-426 with all the human survivors trapped inside the hold of the ship. Every single one of them is eggmorphed. That's a reasonable way to connect these movies.
After this incident, David commences to transform his new found world into a hive planet. The Alien hive world comes into being and colonial forces are on their way to find out what happened to their world.
Cue next 'ALIEN' movie.
Personally, I believe a story along these lines ticks enough boxes to appeal to a majority of fans. Maybe not all. Haters gonna hate no matter what happens. Something like this needs to happen now. The next movie has to embrace components from the prequels and the movies from last century. In order to do so, it's got to bring the current story arc to a close and bridge the gap between 'ALIEN Covenant' and 'ALIEN'. Have Blomkamp direct it. He's got the technical expertise and just needs a script to work with.
-Windebieste.