They may also pick up more regional pax helping fill flights. But I don't think that is their primary business case for launching capital city services. They want the Point ot Point traffic and there should be enough demand for them to fill 10 aircraft.
What other regional traffic could they pick up? QF Link aren't going to give them any and Alliance already has mutual relationships with both QF and VA.
I doubt JQ have a lower cost base. I mean JQ's CEO is on something like $4m a year... REX has a CEO on something like $220k and none of the board are earning much more than that if any. $220k at Jetstar wouldn't even pay for a department head.
JQ's cost advantages come from the economies of scale they have. For example, their ground crew and check-in staff can service flights full-time. REX's restricted operations will mean their staff will spend large blocks of time doing little waiting for the next peak. The same applies to spares where JQ holds a stock of rotable parts that can be spread across 75 A320s. REX won't be able to do this and will need to contract either QF or VA to provide this support because they won't be able to hold parts at all 3 ports for only 10 planes.