I note that the most commonly held misconception regarding the definition of "low-cost carrier" has resurfaced again on this thread (reference apparently expensive fares to Rome etc.).
The term "Low Cost" [airline] actually refers to the corporate cost base of the company. Think in terms of an investor or an accountant examining the company balance sheet. Ideally, a LCC can maintain profits in markets where margins are thin based on keeping its cost base (outgoings) to a minimum. In this case, the term "low cost" does NOT refer to what the passengers pay in terms of their fares. The "low cost" term has over time come to be misunderstood and misrepresented by the media, and for obvious reasons the airlines affected are in no hurry to set the record straight. If the punters mistakenly *assume* that Airline X is going to give them the cheapest possible deal, why would the company disabuse them of that notion?
What the customers actually experience is a "No Frills Carrier"; ie. a very basic level of service throughout their interaction with the company. The "no frills" experience is the key mechanism by which airline companies can reign in their costs and (hopefully) return a profit as a result. Note that LCC's use yield management techniques to maximize income from fares just like any other airline. When booking with one of these companies, you may indeed find a bargain deal. But conversely, you may also pay a surprisingly high fare if you book late on a popular route with limited capacity.
Please note that I am not criticizing this business model in any way; it works and has a legitimate niche in the market. However, I do think that it is beneficial for customers to realize that there is no automatic link between a 'low cost airline' and a 'low fare'. Try to dissociate the two concepts in your own mind when booking a journey. Low costs are what the airline enjoys; no frills is what the customers experience. The fare is another matter entirely!
Good bargain hunting and happy travels to all! SHED.