It will have lower unit costs (CASK) than the core Lufthansa business (primarily due to labour costs and also, perhaps, from airport-related charges at secondary airports), but it will also have lower unit revenues (RASK).
Presumably, if the venture shows signs of being viable only with reduced labour costs, this will give it confidence that it can become even stronger with the additional savings offered by more efficient new aircraft.
In addition to the opportunity a new brand gives in achieving lower labour costs, creating a new brand allows a lower frills product without damaging the Lufthansa brand. A new brand could also be an opportunity in markets where Lufthansa has not historically been strong, but where a fresh new brand could be more appropriate.