Lol factions sounds sweet. I think the whole bounty thing was absolutely the best part of the War. And yes, I would make an airforce, but I'd probably implement a rather rigorous entrance examination. Just so... you know, I don't nuke all the other factions to dust in the first week.
As a means of preventing 1-2 player factions, I think one of the key requirements to actually having a faction should be the presence of a well-developed home base with a significant number of players active in it. Basically what I'm envisioning is we dump the players in the world, they gallivant off to found a new glorious civilization, and once they feel it is advanced enough, they do an arcane ritual to summon the Elder Gods to pass judgement on their society, and see whether or not it is worthy of joining the eternal campaign for... pancakes?
And in case you want a study guide, the entrance exam has 5 parts:
Aeronautical Architecture
Bombardier Qualification
Cannoneer Qualification
Advanced Maneuvering Qualification
Carrier Operations Certification