Flux observation plays an important part in induction motor drive, among which full order observer is focused on mostly due to its excellent attributes, such as close loop simultaneous estimation of motor flux and speed, high immunity to motor parameter variation and so on. Just because flux observation and speed identification relate with each other, the system stability analysis is no easy to implement. So far, stability analysis was almost realized from the view of speed identification with flux amplitude though to be constant, which lacks in strict proof and not comprehensive, making flux observation stability not clear. In this paper, stability is made by decomposing observer system to two subsystem using two scale approach, with the rate of flux observation converging to its real counterpart differing from that of speed identification converging to its real counterpart substantially. Analysis is made of flux observation stability. Simulations validate the analysis.