Lumba, a former pilot, was instrumental in setting up IndiGo's operations in 2005 besides heading national carrier Air India's regional arm, Alliance Air.
Lumba confirmed to PTI that he was not joining IndiGo's proposed ATR division as the health did not permit him to do so.
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However, sources say the airline promoted by Rakesh Gangwal-Rahul Bhatia wanted him to set up the ATR operations in five months time which the former captain did not find viable.
Lumba, sources said, was the first person to be offered the job by IndiGo since the announcement to set up its regional operations with an ATR fleet.
When contacted, an IndiGo spokesperson said, "Capt Lumba for his personal health reasons could not take up such an intense full-time role."
Lumba quit IndiGo in 2009 as its vice-president of operations. Before joining IndiGo, he headed the Alliance Air.
"Setting up operations from scratch is the toughest part and Lumba was IndiGo's best bet for two reasons --- firstly, he had worked with the airline before and secondly, he had more or less a similar profile in his previous stint," said an industry source.
"This is a big setback for IndiGo. Lumba knows the industry like the back of his hand and they needed someone like him to get pilots to join a new start-up," the source added.
On May 9, IndiGo had announced its plans to buy 50 ATR turbo-prop planes worth $1.3 billion in a bid to tap the regional aviation market by starting flights with new aircraft by the year end.
As of now, the low-cost airline operates single type-Airbus A320-of aircraft.
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