Although the nation's aviation industry has experienced slight growth of passengers transportation annually, its structure and fleets being deteriorated steadily. Government has tried to optimize standards through the development of related infrastructure in limited form across the country. However, airlines are experiencing financial distress, with changes in internal and external environmental factors, often leading to bankruptcy. The management of the company as a representative of all shareholders’ right should ensure that financial distress does not lead to bankruptcy. Therefore all the factors having major impact on the financial condition of the company must be identified and monitored continuously using various tools and techniques. The key factors identified come from both internal and external environment of the company in which the company operates. Early recognition of these factors can help management to employ precautionary process before financial distress turn into a critical situation. Awareness regarding these indicators’ changes over time, make informed decisions possible. In order to identify and rank these key factors based on their relative importance, Multi-criteria Decision Making (MCDM) approach based on the fuzzy hierarchical analysis (AHP) technique is applied. The robustness of this method has also been tested by sensitivity analysis. The results assert that financial factors are the most critical factors having major impact on the business stability of airlines. In the meantime, operating income per kilometer is a key variable in this segment. Operational factors, which represent the capacity and cost structure of the company, are ranked next, with the load factor ranking highest in this category. Among external aviation environmental factors, the price per liter is higher than other factors and has a major impact on the profitability of the airline. The results also show that annual inflation and GDP in the country have a major impact on the stability of airlines in the country..