I think the proper business model would depend mostly on the available startup capital, country of origin, market conditions, etc.
In other words, if you've got a million bucks to start an american airline, the best you can hope for is a used Beech 1900 flying regional routes. If however, you have the god given talents of raising money like JetBlue, the sky's the limit. Also, if you happen to be a citizen of country A, it may be difficult to start an airline in country B (take Virgin's LCC in the US for example). Finally, you would need to research what market you plan to serve. If you want to cater to primarily business travellers, you could either focus on flexibility, high levels of service, etc., or you could focus on flexibility, efficiency, and low fares. If however you wished to cater to leisure travellers, pack them in as tightly as possible and charge them next to nothing.
However, regardless of the circumstances, I would argue that a startup's greatest chance of success is to follow the LCC model as demonstrated by Southwest, Ryanair, etc. The quickest way to sell seats is to sell 'em cheap.
One last bit of advice. Unless you're planning on serving regional markets or have serious cash limitations, avoid RJ
's like the plague.
If at first you don't succeed, then skydiving is not for you.