Take your point, Scumfish - but think about it. $500 fares equals 50% loading. $5 fares equals 100% loading and a waiting list - that, to me, equals long term future for the operator.
27/09 - yeah, agree that the 'free' experience is not really free - but business is business, and if an airline can amortise its costs over a wider range of travel related things, then it has a much better chance of surviving.
The point is that we need to stop thinking about the low cost carriers as 'poor cousins' of the legacy traditional airlines - and we need to stop comparing services [or lack thereof].
If you want to spend one hour of your holiday in the lap of luxury, then go to Qantas [well, maybe not Qantas!!] and pay $500. If you want to just get to your destination and THEN start enjoying your holiday - travel with a true LCC, and put up with the discomfort for the hour or two you're onboard.
I for one would rather think of the one hour trip to sunny Queensland as a 'necessary evil' on the way to a great holiday - and save $490 on the way.