Always happy to help!

Even if there is no repeat business from this customer, he would still have
achieved his goal:
   "I really want this gig as it will greatly enhance my portfolio"

It might gain him some recognition, which is valuable and a stepping stone to
other things.
grol

 No, it isn't a bad analogy.  Just because banks use these
inducements it doesn't follow that small businesses don't.  In fact,
I still have several coupons (expired, of course) from a local
camera store good for free 8x10 prints.  This offer doesn't have to
be writ in stone for all time.  He could put in a line item showing
travel expenses, followed by canceling it (if the national 10k race
isn't taking place locally), telling the client that by an amazing
coincidence he would be visiting in that area, and wouldn't bill for
an expense not incurred.   Use this technique for only a short
period of time, and limit it to the first half dozen clients.  Or
less.

 You also make a VERY VERY BAD mistake by implying that if Noel
tried this he would suffer an unaffordable loss which a large bank
could afford (and the bank's giveaways are usually a very small
percentage of what is required to open an account so there probably
wouldn't be any losses, and probably restrictions on closing the
account).  The idea is to offer a *small* inducement.  One that
would slightly reduce the profit, but *not* drive the shoot into red
ink territory.  Noel even stated that "I am considering bidding
substantially lower . . .".  I'm trying to suggest *not* bidding
substantially lower, which would make it harder to raise his fees
for subsequent business.  Instead, he should use a much less drastic
inducement that's also easy to separate from the fees charged, which
would eliminate future business confusion.

 And you cannot be thinking clearly, or I didn't make my point
clear enough.  But either way you seem to have overreacted by at
least a little bit.  The invoice would show the FULL price charged.
Not a reduced 'special' price.  There might be on another line a
clear description of what the inducement was along with limitations
and restrictions.  And another mistake you've made is thinking that
this would become his way of doing business (see "writ in stone,
above").  It's not supposed to do that at all.  It's supposed to
last only long enough to fatten his portfolio, which was the goal.
Not to find a long term way to steal business from competitors.

Regardless, many small businesses have special offers to entice customers.
Maybe he should have chosen another example besides banks, but the point
still stands.

I do agree with you on this.  Don't bid down a "first time" price.  Instead,
offer a promotion that doesn't actually cost you any money, for example one
free print for a sitting, or a discount on a package deal - something that
forces the customer to actually buy something in order to receive the
promotion.  Simply giving them a cut rate on the shoot itself costs you
money for nothing in return.

 Thanks.  It might not be the best solution for everyone, but the
idea is to be flexible or creative.  Sometimes known as "thinking
outside the box." :)