Aviation VHF is AM, which may be why your HTs couldn't or weren't demodulating it correctly. The exception is traffic in UHF would be narrowband FM. The VX-7R does AM on RX but I don't know if the Beowulfs do. The use of tones wouldn't prevent you from hearing the transmissions.
I've never had trouble listening to air traffic, although you should know the military demonstration teams like the Blue Angels and Thunderbirds use frequencies around 250 to 300MHz, so not all radios will tune it. It is AM and not encoded, they don't mind letting you listen, it's really, really common for people to have scanners and aviation radios at air shows.