Part of the reason the crowds don’t seem that large is because they tend to spread out. An airshow doesn’t require everyone to be bunched close together.
The annual Chicago Air and Water Show has an attendence of 2,000,000+ That’s estimated because they don’t charge admission. It also doesn’t include folks like me who go hang out at the airport all this hardware is taking off and landing at, which is actually located in Indiana. They do soak you on the food and beverages. The military always has at least one recruiting booth on hand. It’s PR and new enlistees for them.
Someone like Sean Tucker - that’s a really impressive aerobatic pilot for those of you who don’t know - has corporate sponsors that pay for his plane. The Red Baron squadron is supported by Red Baron pizza.
For the city of Chicago it’s bread and circuses, and PR. But since the viewing beach is there anyway the cost to the city for this party is relatively low. Ditto for Gary, Indiana, whose airshow features similar acts, military recruiting, is also free, and feature high-priced concessions. Gary’s show has lower attendence figures, but they’re still in the 6 digits. (It also happens to be this weekend)
Also this weekend is another, very much smaller airshow I’m planning to go to, the Morris Illinois Skyfest. That one has an admission price to support the show, but at $10/head it’s comparable to a movie and lasts longer. And yes, they’ll charge for food and beverages, too. I don’t know if the city subsidizes it or not. The acts at such shows tend to be smaller and more local, although sometimes bigger names will be seen in these shows. Sometimes, they’ll get local businesses to chip in, too. For the smaller shows it’s about promoting an airport, promoting a flight school at the airport, PR for the airport with the locals, and it’s a way for tomorrow’s big air show stars to get started on the circuit. It’s not unusual for them to offer airplane rides (something the big shows don’t do) for either amusement and/or charitable fund-raising.
There are events sponsored by the “alphabets” - EAA, AOPA, others - that are geared to be by and for pilots or people in the industry. It’s a lot about selling stuff in the aviation industry, as well as having a good time. EAA’s big event up in Oshkosh this year - the admission fee was what, $50 a head? And the food is notoriously overpriced. BRING MONEY. But they don’t just sell av fuel and engine oil there, manufactuers sell entire airplanes at that show so yeah, it’s not just the host organization making money.
Finally, my husband’s radio control aircraft club has a “neighborhood appreciation day” every year, which is an RC model show and they give away food and souvenirs to the locals. Only costs a couple hundred bucks and helps make the neighbors more tolerate of the noise and lets them meet those strange men that hang around the field every weekend. Strictly PR in that case.
Airshow crashes are not common - just very well publicized. In the US, there are stricter regulations about distance from the crowd, which helps keep the innocent bystander injury rate low.
Some shows make money, some break even, some are put on for PR and accepted as an expense.