A system and method for automatically varying the flight envelope of an aircraft based upon the material health of the aircraft and the flight environment is provided. The system includes a plurality of structural health monitoring and load sensors that determine the approximate size and the approximate location of the damage. The system performs residual strength calculations for individual aircraft components to determine the overall aircraft residual strength. The system uses these calculations to determine a maximum flight envelope based on the overall aircraft residual strength, and transmits this information to the flight controller and optionally to the pilot.