Aircraft bands use AM rather than FM because of the FM capture effect. When there is a double transmission with FM, the receiver will lock on to one signal and exclude the other. With AM, you will hear both as well as, possibly, a heterodyne tone if the carriers aren't exactly the same frequency which is much preferable.
FM demodulators can't really demodulate AM signals. AM demodulation can demodulate FM by tuning a bit off the carrier frequency thanks to the fall-off of the filters but the quality isn't great.