This was what puzzled me about FlyBaboo. They seem much closer to a full service airline when you are on them than your usual low cost model, and yet on the routes I have used them on, they were asking significantly cheap fares. The 'extras' weren't there as extra cost - they just came. The CC walked round handing out the free bottles of water, then came round with the free canape tray, then some sweet cakes, then tiramisu in little pots. No charge for checked baggage, either. Big seats too - nearly as much room as BA Club Europe.
You don't always get what you pay for, but this ailine seems very good value in what you do get for what you pay - but I suspect, it's route dependent.