Slats11, your economic model is a little off. It should be Revenue - (Fixed Costs + Product Costs) = Profit. The biggest fixed cost savings which LCC find is in operating from cheaper airfields. They will only operate from expensive airfields when loading is always high (e. g. Hong Kong). Through clever hedging they might save on fuel as well but that can be a double edged sword. Whilst staff costs are cheaper in Asia than in Europe, there is no difference here between legacy and LCC carriers. Both pay peanuts for ground staff and cabin crew but both have to recruit internationally for the flight deck and maintenance. The real savings are in product costs. LCC try to achieve higher turn around times and higher efficiency by removing services which are not required in order to perform the contract of moving the customer from A to B. The inference that LCC are compromising safety is not accurate because if they were, their insurance premiums would move in tandem, killing their profit. Allianz actuaries will be sratching their heads trying to figure out why Malaysian* airlines are now such a big risk. 3 crashes yes, but no obvious link.
*Air Asia Indonesia is controlled by its parent, Air Asia notwithstanding that for political/legal reasons an Indonesian investor appears to own 51%.