As an AvA noob, I will give a few of my observations and thoughts...
First, a little history. I've popped into the AvA on many occasions through the years. Never saw any reason to stay. I invariably found a squad on one side or the other picking anybody who dared up on the other side. Came in a few times a few months ago when the "war" was going on (on allied side) and generally found a good furball going but found the plane choices / restrictions / imbalance to make it not much more than an occasional diversion... not a new home. I've recently joined JG11 and have spent a few squad nights and even a few non-squad nights in there and exactly twice since Bug's War started.
I see many threads, including this one, with lots of ideas on how to "fix" the AvA arena. What is lacking from these discussions is a definition of what needs to be fixed and an acknowledgement that what any one person or group might like to see in the AvA is not necessarily what would make the AvA attract enough players to make the arena a viable, at least during peak hours.
Now some observations. These will be from my perspective, which I consider to be one of the typical MA furballer who would really like to fly in AvA but just never seems to see the fun in it...
First, as a typical MA player who ventures into the AvA, I am interested in seeing (and participating in) fights between the historical adversaries. That part, at least, is always found!

The second thing I (the typical MA player) am going to look for is a fair fight or at least a fighting chance. This is the single biggest thing that is going to turn away a MA player who comes to the AvA looking to expand his horizons. With all other things being equal, if I came to this current setup wanting to fly axis planes, I would look at the field where the fights have been (A13?), see that only the 109E4 is available, see that I am fighting against equal or higher numbers of Spit 5's, and then I'd go back to the MA. It's not that I wouldn't fight a Spit5 with an E4, but it's not going to work all that well for the axis in a many-on-many fight. I'm not all that interested in flying 2 or 3 sectors from the base where the F4 is available so off to the MA for me. My point is this might be a good setup from a historical perspective and might work well for specific events, but the guy who has a few extra minutes for a quick sortie or two is not going to pick AvA over the MA with this type of setup. As long as that is the case, it will be difficult at best to keep a large enough player base to keep the arena fun. From my perspective (again, the MA player looking for a fight), I'd like to see an even match up available at any place the fight is. Otherwise, an imbalance has been created.
The third thing I am wanting to see when I look into the arena is the chance to find a decent fight. If either side is severely outnumbering the other, I'm probably heading to the MA. If there is a big milk-run fest going on, I'm probably heading to the MA. Not that these things can't work themselves out in the course of an evening, but my flying time is my flying time and I want to maximize fun.
Now, for me personally, these 3 things would make the AvA an attractive alternative to the MA. Bonus things might be rolling plane sets (I'm all in favor of flying 109Es and Spit Is) and maybe even some occasional non-historic match-ups (Germany vs Japan anyone?) but the 3 things above are what I look for in any arena. They are not, however, what everybody looks for in an arena. With these 3 things in place, we'd likely have a nice AvA furball setup (which I wouldn't mind) but not the full-spectrum arena I sense most people would like to see.
So how do we attract all the types of people it would take to make the AvA full-spectrum? That is a tough one. The axis side did not have an effective strategic bomber force and even though the Germans had what might have been an effective strategic bomber (the He177?), it is not modelled in the game. This automatically puts the Axis at a severe disadvantage and makes creating a "balanced" arena very difficult. You could limit allies to B-25s and Bostons, but then you're going to lose some of your buff types who might be willing to come over or who want to fly their heavies against the Luftwaffe. To my mind, this is the single biggest sticking point in making AvA an arena that appeals to anyone besides furballers and allied buffers. Let's say we get past this issue, though, and focus on the next thing I see brought up in this forum a lot - avoiding the MA horde mentality.
First, we have to acknowledge that everybody goes where the fight is. In an arena with the population of the AvA, there is usually only one fight. If one side outnumbers the other, there is a horde. If someone decides to go somewhere besides where the one fight is, they are milk-running. If the fight is over a base, one side is going to be higher. Just about any scenario you can think of makes one side out to be the dweebs / horde / alt-monkey. The question is not really how to eliminate this behavior, but how to minimize its effect.
One idea I've always liked is making the objectives something other than capturing airfields. As was pointed out earlier in this thread, capturing territory was not normally the objective of the air forces. I've always thought a series of large towns or cities, perhaps even with multiple map rooms that have to be captured, could be placed between series of airfields. The fights would be over the cities... not the airfields. I don't know if it's even possible to do it, but having progressive rows of these strategic targets somehow tied to what airfields are available (not just capture the town = capture the field) could really make fighting over the cities something worth doing. Making them large enough that it takes bombers and not just fighters to destroy them gives the strat / buff guys something to do as well as a nice area to focus a tank battle. I rarely up anything besides fighters so I'm not really sure if those ideas would be appealling to those guys, but it seems like it would be to me!
This is probably the longest post I've made in a long time so I'm going to cut it off here. I've always thought AvA had a lot of untapped potential and would like to see it prosper. Really, though, I just want number 1 - 3 above!

Regards,
Hammer