I was not being rude, merely making a point.
What Ryanair and EasyJet, and for that matter BA on their new 'low' fares do, is to perfectly price discriminate. They will make their money by advertising low fares - extremely low in the case of Ryanair - but only selling a limited number of those seats to the public. For example when Ryanair have a seat sale, they often state 1/2 million seats on sale: bearing in mind that these will be available on flights over a period of the following 3 months while the sale last only a few days, this will equate perhaps at the most 1 in 30 seats over that 3-month period: around 3%.
Consider that for the most part, the only people who are normally going to purchase those fares will be booking many months in advance anyway - the sale fares of €0.50 one-way are generally only going to be taken up by these same people. This takes the 3% of customers with the lowest 'willingness to pay' who would only have paid €10 per ticket at the maximum. This leaves the remaining 97% who are obliged to pay more as there are of course no remaining cheap tickets, who will generally be looking for tickets closer to departure date and therefore miss the sale prices.
Through increasing the price for flights as the departure date moves closer, they are able to perfectly price discriminate, by ensuring that those who both need a flight at shorter notice, are not prepared to wait and are therefore prepared to pay more. This enables profit to be maximised on the seat sales to a greater extent than a traditional airline would, as the pricing is more fluid due to the electronic, automatic calculation of the most economic prices to charge to fill all seats yet not have any further demand for the seats at the prices available.
Note that perfect price discrimination means matching the price that is charged to the maximum amount that an individual is prepared to pay.
Of course there is certainly an element of marketing strategy in the business model - their adverts that stress the lower fares encourage people to look immediately at Ryanair when they are interested in minimising their ticket costs - however when the market picks up again, people will continue to associate them with low prices and new business will be stimulated through new markets being able to afford to fly, even if the top end of the market moves back to the higher-fare airlines in order to gain the benefits of comfort etc. The business model therefore gains the best of both worlds by entering a new market (rather than the existing one in which BA and bmi operate of top-end business travellers) while also being low-cost. This is a sound management strategy that is very well-established as it has differentiated itself by being low cost.
With regards to minimising costs, I cannot understand how you think that Ryanair can ever have any higher costs than those of a more traditional airline in any circumstances: any airline could have one of those 'variables' fail, however they are minimising the number of costs by ensuring that they do not have catering or cargo for example, which can only put them ahead of BA who have had 2 strikes in the last 6 months (check-in staff) that Ryanair have not. This is since they have outsourced their costs and therefore the responsibilities for ensuring staff are not on strike, as they instead have the power of contract concellation over the subcontractor instead. They couldn't care less if the staff are underpaid and surly as they do not operate on a business model of differentiating themselves by quality of service, but instead by low cost.
As long as people are prepared to pay so little for tickets, there will be a business case for such airlines, in complement to traditional ones.