Aviation Working Group (AWG), an association of aircraft manufacturers and lessors, on Wednesday once again downgraded India to negative due to delays in repossession of Go First aircraft.

The downgrade could pose challenges to start-ups and financially weak Indian carriers.

The Wadia-group airline suspended operations after filing for insolvency on May 2. Immediately thereafter airline’s lessors terminated lease contracts and sought deregistration of 49 of 54 aircraft of Go First.

AWG had put India on a watchlist with negative outlook in May but it was revised in October after Ministry of Corporate Affairs notified that aircraft leases were not covered under moratorium under Insolvency and Bankruptcy Code. Subsequently the Directorate General of Civil Aviation too informed Delhi High Court in an ongoing matter that the notification will have a retrospective effect and will not apply to Go First aircraft.

While revising its India outlook, AWG said there is no judicial action in lessors’ writ petitions in Delhi High Court seeking repossession of the planes. It further said no remedies have been made available to lessors as per global norms nor have lessors been able to access aircraft to determine that their aircraft are being maintained in accordance with the leases as required by such norms.