Virgin has lost out on slots between London and Moscow after the CAA awarded the rights to easyJet.
The airline had hoped to launch flights from London Heathrow next spring, but instead EasyJet will launch flights from London Gatwick.
In a statement, Virgin said it was "very disappointed" and "perplexed" by the CAA's decision.
"Data shows that passengers travelling between Moscow and London use Heathrow airport and not Gatwick, long haul connectivity is far greater via Heathrow and this decision will also reduce capacity between the two capitals which is not good for UK consumers," it said.
"The flying that disappeared with bmi's exit from the route has not been remedied despite the European Competition Authorities identifying this very issue. Now there will be a major shortage of capacity for UK business travellers seeking to trade with one of the world's fastest growing economies.
Easyjet will launch Moscow flights next spring, operating an Airbus A320 on two services a day, with fares starting from £125 return.
The airline claims this will compare to current fares of over £1000 for an economy ticket.
Tickets will be on sale in the coming weeks.
by Bev Fearis
The four-hour flights will depart London at 07:00 and 14:00 each day departing Moscow at 14:40 and 21:40.
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...how much this has to do with Virgin's using LHR. As everyone knows LHR is full to bursting and LGW has far more capacity. Of course, a case could be made for interlining as Virgin have tried to do - but a far better case could be made for using a less overcrowded airport. Speaking personally I like Virgin's services - but my preference for LGW tends to outweigh Virgin's good service.
By Richard English, Friday, October 26, 2012