Recently had a couple of flights on no frills airlines.  Interesting things I noted:

• All had names that were colors (rouge, peach, jet blue)
• Flight attendents and pilots were all very young (cheaper salaries I guess)
• Saftey demonstration was not on video but actually walked through Vana White style
• leg room is not really enough for a tall person.

I was also told that myth busters TV show had demonstrated that loading by zone was faster than by seat number or fully random. Not  sure my experience bore this out about faster loading, although for this recent experience I had, I will say all flights left on time.

Does the business model make sense?

Clearly there is a market for inexpensive travel.  Of course it must appear safe, be efficient and although you pay for each service the quality of services must be acceptable.

If your personal air travel goal is to simply get from a to b at the lowest cost with minimal or no value add services a no frills airline is probably a good choice for you.

Are full service airlines at risk.

Its probable the air travel market for full service airlines (which currently have the largest market share worldwide) will continue to be strong and will remain the largest with value airlines serving a smaller but important segement of air travellers.