You're conflating
safety regulation of aviation - clearly the Commonwealth's patch - with regulation to achieve socio-economic policies of a state within a state - clearly the patch of each state.
There are very few constitutional constraints on a state's power to spend the state's money. There is no doubt that a state can spend its money on subsidising the travel of people within the state.
There were route licensing systems within numerous states for decades. I can remember that when I started flying training in the mid-80's, the flying training organisation had its AOC and various state licenses in frames on its reception room wall. Those intrastate licensing regimes would have been knocked over on constitutional grounds a long time ago, if they were unconstitutional.
I'll do some research to find out whether there has been a challenge. If there were, my confident guess is that it was unsuccessful.
PS: I should have remembered that the constitutionality of state intrastate licensing schemes for other than safety purposes was settled in the Airlines of NSW cases,
here and
here, in the High Court in the 1960s.
Here's an old but very informative Report of the (then) Industry Commission.