It is a truism of statistics that two people can study the same data and see radically different outcomes. Such is the case with the large commercial jet market. First, the facts: Airbus and Boeing took more than 2,200 net orders in 2011, twice the level of 2010 and far above the 1,011 jets they delivered. The two airframers are sitting on backlogs equivalent to about seven years' worth of output. And production increases underway will soon have Airbus churning out 42 A320 narrowbody jets a month and Boeing the same number of 737s by 2014, with talk of going even higher.

To Adam Pilarski, senior vice president at aviation consulting firm Avitas, it is all too good to last. He believes high fuel prices, plentiful financing backed by government export-credit agencies and aggressive selling by two airframers aiming to hold off new competitors have created a hyper demand that is unsustainable. “If you want to buy a new aircraft, you have to wait years for it,” he says. “To me, that's a sign of a bubble.”

But Heidi Wood, Morgan Stanley's senior aerospace and defense analyst, thinks otherwise. Delivery schedules for the next 12 months are solid, she notes. Beyond that, Boeing and Airbus have become so adept at overbooking and spreading risk that they can easily shift another customer into a slot that has been canceled or deferred and keep assembly lines humming. “They may have sold 30 airplanes two or three times over,” she says. “I don't care. What I care about is the feasibility of the 30. I don't believe there are 90. I never did.”

The debate about whether surging demand for jets is a bubble that will pop and leave the market flooded with an oversupply of jets holds huge implications for aircraft manufacturers, their suppliers, airlines and aircraft lessors. The issue took center stage at the recent International Society of Transport Aircraft Trading (Istat) conference in Phoenix. Skeptics question how Kingfisher Airlines, an Indian carrier on the cusp of collapse, can take delivery of the dozens of Airbus A320s, A330s and A350s it has on order. They wonder whether Norwegian Air Shuttle, which has a fleet of 64 aircraft, can pay for 122 Boeing 737-8 MAX's and 737-800s it ordered in January. And the list goes on. “There seems to be a bit of exuberance in airplane orders,” notes Henri Courpron, CEO of International Lease Finance Corp. “We should not confuse selling aircraft with delivering aircraft.”

Another concern is that demand for used but relatively young jets such as 737-800s is stuck in low gear. “What you've got here is a situation where people prefer new jets because they can get financing for them,” says Teal Group analyst Richard Aboulafia. “They want nothing to do with older jets. That's a sure sign the market is getting pretty frothy.” He believes Boeing and Airbus will have a hard time finding takers for 84 narrowbody jets a month as they switch over to the reengined A320NEO and 737 MAX in the middle of the decade.

The two aircraft giants counter that they are still taking far more orders than they can fill (see graphic). Boeing expects close to 1,000 firm orders for the reengined 737 MAX this year. The wait time for a new jet is now 7-9 years, depending on the model, well above the company's goal of four years. Mike Bair, senior vice president for marketing at Boeing Commercial Airplanes, argues that the hefty backlog—a record 3,700 aircraft at the start of 2012—will cushion the company when the next downturn hits. “We'll be able to motor through it,” he says.

Whether Bair is correct may depend on whether Boeing and Airbus have perfected their models for balancing supply, demand and risk. While the airframers once tossed orders into an undifferentiated pile, today slots are carefully allocated to limit exposure to a crisis in a given region or a flawed airline business model. That gives them a higher degree of confidence when they overbook delivery slots. “If you looked at the number of positions that get shuffled, you would be shocked,” says Jefferies & Co. aerospace analyst Howard A. Rubel. “It's not the good old days, when one tail meant one delivery slot.”

In 2008-09, when soaring fuel prices and then a global financial crisis triggered a collapse in demand for new aircraft, Boeing and Airbus saw scores of orders canceled or deferred. But because they had overbooked, they were able to move other airlines into those delivery slots and avoid deep production cuts (loan guarantees from export-credit agencies also proved crucial when the credit markets froze). By contrast, Embraer, which had been more restrained in overbooking orders, was forced to scale back production of its jets after the downturn hit.

That is not to say that Boeing and Airbus are immune to an extraneous event, such as worsening of Europe's sovereign-debt crisis, a rapid decline in China's growth or a war in the Middle East. Pilarski predicts that oil prices, a key driver of demand for new, more fuel efficient jets, will plummet in the next six years (see article below). And Republicans in the U.S. Congress are demanding that the government's export bank scale back its guarantees of financing for aircraft purchases, which hit a record $11 billion last year, now that credit markets have recovered.

Such worries are one reason that 55% of attendees polled at the Istat conference believe Boeing and Airbus are producing too many jets, with nearly three-quarters saying output of 737s and A320s is too high. Then again, it is not an impartial group. “I think the lessors are promoting their self-interests,” says Scott Thompson, the leader of PwC's U.S. A&D practice. “They benefit from a tight aircraft market because it raises lease rates and residual values of aircraft.”

Thompson dismisses talk of an order bubble. “You can't look at it by carrier,” he says. “In a growing market, if one [airline] goes under, somebody else will pick up the demand.”

Rubel says that recently announced production increases by Boeing and Airbus will push the supply of jets to the high end of his demand forecast. He also thinks record load factors in the U.S. could force airlines to order more aircraft if demand for air travel improves. “The last time I checked, you couldn't operate an airplane with more passengers than seats,” he says.

And Air Lease Corp. CEO Steven Udvar-Hazy, a pioneer in the aircraft leasing business, foresees robust demand to replace aging jets, particularly from airlines in North America. At the Istat event, he said that in the next 7-8 years, “we will have more aircraft that will hit the 20-25-year span of age than we've ever had before. . . . We can't just look at the numbers of aircraft being built; we have to look at the numbers that are becoming obsolete.”

To Wood, the need to replace aircraft in the U.S. and Europe and growing air travel in the Asia-Pacific and Middle East regions are proof that the demand upswing has legs. “You can't bet against the cycle,” she says. “The math doesn't add up.”