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An Indian appeals tribunal upheld insolvency proceedings against Go First on Monday, throwing a spanner in the works for the airline's lessors, who are attempting to take back their planes.

At least three leasing companies, including SMBC Aviation Capital, had challenged a tribunal ruling granting Go Airlines (India), widely known as Go First, bankruptcy protection earlier this month.

In granting bankruptcy protection, the tribunal had ordered a moratorium on Go First's assets and leases, making it tougher for the lessors, who have filed requests with India's aviation regulator for the return of at least 42 Go First planes after rental payments were missed.

The airline has blamed its financial woes on problems with engines from Raytheon-owned Pratt & Whitney, which it said had led to the grounding of nearly half its fleet of Airbus A320 neos. The U.S. engine maker has said the claims are "without merit".

The appeals tribunal said on Monday the National Company Law Tribunal will decide whether lessors who terminated their leases before the bankruptcy proceedings began can repossess aircraft.

Despite the development, lessors cannot afford not to do business with Indian airlines, said Mark Martin, CEO at aviation consulting firm Martin Consulting.

India is "lucrative" because it represents the world's largest, fastest-growing aviation market, he added.

Lessors, however, have warned that the Go First bankruptcy makes India a 'risky' jurisdiction which will lead to higher leasing costs for domestic carriers when striking new deals.

Go First Chairman Varun Berry and lessor SMBC Aviation Capital did not immediately respond to requests for comment.