Okay, here's a different idea to make "life-and-death" a little more meaningful, and perhaps a bit entertaining, but without grounding a player for a repelling five minutes:
Every AH II subscriber would automatically get paid 20 perk points a month. That's right, a perk for each working day whether you rate it or not.
Every subscriber would also have three levels of Character Life (CL1, CL2 and CL3). The most desirable is CL1 and the least desirable is CL3. None ground you. All three affect your rank and perks. I would suggest that all three be controlled by configurable arena parameters.
CL1
You start an AH II session in CL1 - when you first take off you are flying as CL1. This is intended to be your primary character life level. CL1 earns perk points that are not available for use by the other two CL's. In addition CL1 also provides the lion's share scoring basis for determining rank. So it is desirable to stay at the CL1 level. In game there is no change in icon appearance - you only see your CL state in the hangar.
CL2
Upon your CL1's death only CL2 is available for 5 minutes. When you takeoff in CL2 then you remain in CL2, even past the 5 minutes, until you land, bail or are killed. If you go the required 5 minutes in CL2 without dying (even if you subsequently die in flight after the 5 minutes) then the next time you take off you automatically revert to CL1. While in CL2 you earn perk points at 70 percent the rate of CL1. These perks are not available for other CLs. Moreover CL2 scoring success calculation in relation to CL1 provides only 40 percent of the total rank calculation while score losses are counted equally with CL1.
CL3
If, while in CL2, you die again before the 5 minutes are up you proceed to CL3 for 5 minutes. While in CL3 you don't earn perks and no perk rides are available. In addition CL3 scoring success provides only 10 percent of total rank calculation, but score losses are counted equally with CL1 and CL2. You stay in CL3 for 5 minutes, and then, a la "Get Out of Jail Free" you revert to CL1 with all its wondrous rank and privilege.
SGLI
For those who refuse to be stuck five minutes at CL3 without perk rides another feature should be added, called SGLI (Serviceman's Group Life Insurance). If you suddenly find yourself in CL3 you can cash in your SGLI policy in the hangar and immediately revert to CL1. The policy must be bought previously when you are at a CL1 level and is only available for use later at the CL3 level. You sign up for an SGLI policy in the hanger for say 5 perks.
[X] Yes Dale, sign me up today for some of that SGLI action !!
Any subscriber can use the 20 perks provided monthly to buy SGLI policies. You can also use CL1 perk points for SGLI if you have any.
Now, here's the big payoff. SGLI policies mature in two weeks. So if you sign up for an SGLI policy and do not cash it for two weeks, then you get back double the perks you put into it, i.e. 10 whopping perks. Woo Hoo!
This would provide a modest "life-and-death" sensation without grounding anyone.