The study investigates the most important determinants of the financial stability of Nigerian domestic airlines, focusing on the external economic conditions, regulatory barriers, and operational inefficiency. Persistent financial instability in the Nigerian aviation sector has resulted in disruption of operations, massive debt profile, and closure of several domestic airlines, which is a serious threat to the growth and sustainability of the industry; the problem statement indicated this. The research design used in the study was a descriptive survey. Data were collected in the form of structured questionnaires, which were administered to airline managers, financial officers, and operational staff in selected Nigerian domestic airlines. The data were analyzed with the application of descriptive statistics as well as multiple regression analysis to test the relationship between the independent variables and financial stability. Findings established that the effects of currency fluctuations, inflation, and fuel price instability on airlines’ financial performance were very adverse. Other regulatory bottlenecks, like high taxes and high costs of compliance, were also found to undermine profitability and liquidity. Additionally, operational inefficiencies arising from bad fleet management, postponed maintenance, and poor integration of technology were found to be the primary causal factors of the instability of finances. Based on the foregoing findings, the study proposes that the government should come up with pro-growth policies, tax incentives, and subsidy programmes to alleviate the economic burden on domestic airlines. Furthermore, interest in the attainment of modern fleet management systems, optimized operations of the routes, and cost-control techniques is essential for improving operational efficiency and financial stability of the airline companies.