To understand the physics of air entrainment in thin-film liquid coating and other applications, the stability characteristics of general stratified two-layer Poiseuille-Couette flow are examined in inclined channels. Only one mode of instability, the interfacial mode, is obtained in the long-wave asymptotic limit. The generalized eigenvalue problem, formed by spectral decomposition and solution of the general two-layer Orr-Sommerfeld equation, is solved to obtain all of the critical modes. Analysis of the air/liquid interface corresponding to experiments reveals that because of the large density variation between the two layers, the interfacial mode is the only mode of instability in air entrainment. Results from the stability analysis of the flow near the contact line where air entrainment occurs are consistent with previous experimental observations.