Many industries would gladly change places with commercial aerospace—huge backlogs, customers eager to take ownership of multimillion-dollar products, macro forces that virtually assure a demand for continuous innovation and product evolution and a guaranteed revenue stream that will last for years.

Despite what should be the best of times, however, many suppliers are anxious. They are worried that industry bellwethers Boeing and Airbus will be unable to sustain the high production rates needed to fulfill delivery promises to airline customers. More unsettling, they simply do not believe what the two airframe manufacturers are telling them, and they are not shy about sharing how they feel.

Reasonable people can debate how deep the skepticism runs or how much of a problem it might be down the road, but this much is certain: It largely defined the 2012 Farnborough air show, fittingly marked by gray clouds and intermittent rain throughout the July 9-13 event. So unmistakable was the muted tone that Airbus Americas Chairman T. Allan McArtor said it felt like “a general malaise.” Others expressed similar sentiments. Acknowledging the credibility gap that Airbus and its archrival are facing, McArtor said, “OEMs have got to do a better job of making a high-confidence argument that there is a market globally.” (See other notable quotes on p. 44).

One of the many suppliers that will be essential to both Airbus and Boeing outlined a short list of factors that could interrupt the OEMs' best-laid plans: The deepening crisis in the eurozone; the slowdown in the global economy, especially in the Asia-Pacific region; imposition of higher taxes on airlines; the financial difficulty many carriers are having, including some who have placed orders for hundreds of new airplanes, and airlines' access to financing. “[Suppliers] can't ignore all these things, yet there may be too much caution,” the company's president said. “At some level, it can become a self-fulfilling prophecy.”

Their concern is that they could be left holding millions of dollars of inventory if a significant number of orders for new airplanes were to evaporate in response, say, to the global economy tanking. Airbus and Boeing could absorb the financial blow, but smaller suppliers could find themselves struggling mightily. “If our customers and our customers' customers would guarantee they will buy our product no matter what, then we will invest whatever it takes to ensure a reliable flow of parts; otherwise, we are not going to put ourselves in a position where we could be left holding the bag. We experienced that once before, and we are not going to let it happen again.” Other suppliers share this concern.

Whether such a hard-line approach by suppliers winds up hampering the current “up” cycle remains to be seen. Many industry veterans actually were relieved that Farnborough 2012 was so subdued, at least in terms of new aircraft orders. The net tally was down 45% from the frenzied buying at Paris last year—but it was up 17% from Farnborough 2010. Altogether, Boeing and Airbus raked in 464 orders, with 370 belonging to Boeing. Leasing companies dominated, comprising 52% of the large aircraft announcements.

Striking a much lower profile at Farnborough were defense contractors from around the world. What they lacked in visibility and “buzz” though was more than offset by frenetic activity in their chalets, especially among larger companies.

Conspicuous by its absence was Northrop Grumman, which decided months ago to forgo Farnborough and book the savings. It is too soon to tell if this decision was courageous or short-sighted, but the company did what every other major defense contractor has threatened for years: resist the competitive pressure to attend at a cost of millions of dollars.

Whether it is shaving costs or managing inflated expectations for order activity, it is all part of the psychology that goes with the international jamborees known as Farnborough and Paris—and quite possibly, a new normal that seems to have settled across aerospace. All segments are operating in a business climate marked by higher risk and uncertainty.