The air cargo market appeared to be on the way to sustained growth early in 2011, but in May it started shrinking. As a result, full-year results should show a slight decline versus the 2010 level. This is not a good start for 2012, and indicates that businesses' confidence in the economy is weak.

The U.S. Air Force's tanker contract has been awarded, Airbus and Boeing have moved to upgrade the A320 and 737, and NASA's space shuttle has flown its last mission. It's time to move on to 2012 and the next round of big developments in the aerospace and defense industry. Here are 12 to keep an eye on.

When TUI Travel, the European launch customer for Boeing's 787, finally takes delivery of its first aircraft, the team at Monarch Aircraft Engineering should be ready to provide maintenance support through the Goldcare option. The technical arm of London Luton-based Monarch Airlines, is currently Boeing's only airframe maintenance partner for the Goldcare program. Despite Monarch canceling its own order for six 787s in September of last year, Boeing has confirmed that Monarch will remain a Goldcare partner.

There are no votes to be won for adding airport capacity in London, so there is little political interest in tackling one of the most contentious air transport policy issues in the U.K. But policy makers are accepting, albeit somewhat grudgingly, that simply maintaining the status quo is not tenable.

For EADS investors, this point been has a long time coming: Airbus's financial performance is set to ramp up. Now the question is whether conditions beyond its control will allow the aircraft maker to follow through. With Airbus heading into new record output territory, production is due to hit 570 aircraft this year, including, for the first time, 30 A380s. Louis Gallois, CEO of Airbus parent EADS, promises the financial performance will take off, too.

This time it was supposed to be different for the Franco-German aerospace giant—a smooth transition of power, with a new management team building on the foundation put in place by its predecessor.

Looking purely at facts, the crash of Ethiopian Airlines Flight 409 can likely be explained as a pilot-fatigue-induced loss-of-control accident. But as a bitter dispute over the findings shows, the case is imbued with political overtones—in itself a strong reason for concerns over safety cultures.

SkyTeam may be adding five new members this year, but CEO Michael Wisbrun says he still favors integration over network expansion.