Officially, Libya is dry, but booze can be fairly easily obtained - it's usually smuggled in from Malta. I worked for 5 years in Libya and when I left, the guys I worked with gave me a leaving party lubricated with 2 cases of Heineken and several bottles of Johnny Walker
As for Lib Arab, I only flew on them once, on an ageing F27 from Gailo to Tripoli, stopping at nearly every desert strip on the way. I always remember seeing the carcase of another F27 half buried in the sand at the end of the runway in Gailo. Apparently it "didn't make the runway" several years ago, and no-one bothered to clear it up!
We used another internal airline - Tibesti, I think - to fly from Tripoli to Benghazi which was quite reasonable.