The effects of wall inertia on instabilities in a collapsible channel with a long finite-length flexible wall containing a high Reynolds number flow of incompressible fluid are studied. Using the ideas of interactive boundary layer theory, the system is described by a one-dimensional model that couples inviscid flow outside the boundary layers formed on the channel walls with the deformation of the flexible wall. The observed instability is a form of flutter, which is superposed on the behaviour of the system when the wall mass is neglected. We show that the flutter has a positive growth rate because the fluid loading acts as a negative damping in the system. We discuss these findings in relation to other work on self-excited oscillations in collapsible channels.