Here are some suggestions for a custom arena.  
There is a terrain called "Mongoose".  I didn't ask for it to be named after me.  It was my idea, and Bustr did an excellent job of setting it up.  It is two bases on either side of a canyon.  You take off, fly into the canyon, and play tag.  The canyon keeps players from chasing each other for miles across the countryside.  
Turning off Killshooter:
Options > Arena Setup > Environment > Arena Settings > Arena Flags > uncheck Killshooter.
This way, you can each be on the same team, and still shoot each other down.
Optional, turn on Air Show Smoke:
Options > Arena Setup > Environment > Arena Settings > Flight Mode Flags > check Air Show Smoke
Use the R key on your keyboard to turn smoke on and off.
Really optional, turn on Lead Computed Gunsight:
Options > Arena Setup > Environment > Arena Settings > Flight Mode Flags > check Lead Computer Gunsight
You should only do this if you have people who really can't hit the side of a barn from the inside.
You can tab through your targets, and whichever target you select with have a small X to show where you aim to hit them.
Hope this helps.  Have fun.