British Airways has suffered another blow after losing out on a contract to Virgin Atlantic to take Gordon Brown and his entourage to the G20 summit in Pittsburgh.

BA had been carrying successive British Prime Ministers since privatisation in the 1980s. But next month’s summit will be the first time Virgin has flown Gordon Brown, and is expected to generate huge media interest as it will be the first hosted by President Obama.

British Airways lost out to Virgin which undercut the price by around 30 percent.

A Downing Street spokesman told The Telegraph: “Decisions relating to the Prime Minister’s travel, including the choice of aeroplane for international visits, are taken to deliver maximum value for money for the taxpayer as well as ensuring the most efficient and effective use of the Prime Minister’s time.”

A Virgin Atlantic spokesman said: “We are clearly delighted that the Prime Minsiter has chosen to fly with us. We hope it will b e the first of many similar trips.

The Prime Minister also uses the RAF, or Queen’s flight, based at RAF Northolt, from time to time depending on cost and the size of his delegation.

In June, on the 25th anniversary of Virgin Atlantic, Gordon Brown praised the company for its “pioneering spirit”.

The announcement comes as BA grapples with record losses. It is also planning to cut 3,700 of its 40,000.