And, to the extent that those state laws are inconsistent with Commonwealth laws relating to aviation safety, the Commonwealth laws will prevail.
The states can still regulate intrastate aviation on economic grounds, and some still do. The licensing of intrastate air routes is done for economic reasons - e.g to give an operator monopoly rights to a route, to increase the financial viability of the route.
The states had to pass carriers liability insurance legislation so that there was a uniform national scheme for carriers liability insurance. That’s because insurance isn’t about safety.