I heard this was in the works a while back, but it went surprisingly quiet. With the direction Thomas Cook are going in, they clearly don’t need an airline. They are close to Club Med - who work on a very similar model, concentrate on the hotel experience and leave the flying to someone else.
There is real credibility in the UK operation being sold to Virgin - it would really create a decent hub in Manchester, and flexibility throughout their network, and the overall flyBe network too if they could keep the cost base low. Don’t assume that as TCX is a holiday/leisure airline, that whoever takes them over would continue as such.
In Germany, it could be a little trickier and a straight fight between LH and IAG, but I also wouldn’t rule out a VC in order to retain the well regarded Condor name.