Virgin Sun (the tour operator) was sold because Virgin found it difficult to secure enough hotel beds to make the operation viable in a market dominated by just a few pan-European tour operators. Plus, it appears Virgin decided a Mediterranean tour operation didn't fit in with Virgin's "premium" image.
Virgin Sun the airline was very successful in delivering their part of the operation.
Virgin sold the company to First Choice, but not the Virgin Sun brand. Any holidays booked after October 2001 will be operated by First Choice, the aircraft will be returned to their lessors, the pilots will go back to work for Virgin Atlantic, other staff will be offered jobs by Air 2000, Virgin and First Choice and Air 2000 get Virgin Sun's slots at Manchester and Gatwick. The latter appears to be the main reason for the purchase of Virgin Sun.
A bit long winded, but just wanted to make it clear that the shut down of Virgin Sun was in any way due to a failiure, or problems with the airline. It was Virgin making the decision to get out of the market, and First Choice unsurprisingly closing the operation since the deal did not allow them rights to use the Virgin Sun brand.
While it's true that Virgin Express has so far been a complete disaster, this press release from last week may indicate the company has finally turned the corner;
Brussels-based Virgin Express made a €511,000 profit in April, turning round a €2.2m loss in the same month last year. Virgin Express admits that ‘it is not and will not become standard practice’ to issue monthly figures.
The improved performance over April 2000 validates a major restructuring which started this time last year. The fleet was halved, routes were dropped while the Shannon-based Irish operation and Brussels-based charter business were pulled. As a result, capacity and passenger carryings have dropped but load factor has increased. April 2001 ASKs were 30.1% down at 606.6m with RPKs down 14.1% to543.5m. However, load factor leapt 16.7% to 89.6%, with the number of passengers carried down 16% to 636,673. Turnover for April 2001 came in at €18.7m.
For what it's worth, I don't believe Virgin have any real interest in GB Airways, with little to gain by attempting to take them over.
On the other hand, GB Airways provide British Airways with a network presence in many markets they could not profitably serve, and are a valuable source of connecting traffic, particularly for Latin American routes. British Airways would fight very hard to keep GB Airways as a franchise carrier, should Virgin make a bid for them (which I doubt they will)