My bet is they're gambling on a few things going their way
1) Reduced competition from VA. Both the administrator and Bain have both indicated any future VA would be a significantly smaller operation.
2) The general public is now wary of VA. Even with the take over by Bain, lot's of people are still expecting them to go under.
3) Rex run quite a tight ship in general. If they can bring the same model across to this new service there's a good chance they'll be competitive price wise, whilst still offering a solid no frills service.
4) Considerably lower entry price to the market - cheaper planes, cheaper staff, cheaper everything really. This means their overheads will be quite low, so if the market continues to rebound over the next 2 - 3 years, suddenly they will find themselves in a pretty solid position.
Pretty much everyone i speak to who knows anything about Rex equates them to like a flying bus service. Nothing fancy, but reliable and reasonably priced for the regional market. I've never had them cancel a flight, or even be delayed. The service is consistent in regards to what you get, and often its the same staff member serving you each flight.