You didn't mention if this was intended to be an elimination contest or some kind of multi-round points contest. Or a multi round elimination contest. I always thought a real, multi-round elimination contest with the losers in every round flying off to stay in the contest would be great. First place- all wins, second place 1 loss, third place 2 losses, etc. Flying off to third place would require something like 50 matches for 16 flyers. But with fuel shutoffs required on the planes and a kill wins, the matches likely would be in the 30 second range.
You've basically come up with a set of "slow" Fast rules. The pit crew and fast with their launch in the first second starts was actually part of the attraction. It added a lot of drama to the start. The kill added drama to the finish. Ending the match when a plane hit the ground after a midair was for safety. Planes were often badly damaged in a midair and often not safe to fly so ending the match discouraged intentional midairs as a tactic to a degree. Putting up badly damaged planes just for air time isn't safe either.
I'd go with either the kill/unflyable midair ends the match, or cuts only/one unflyable plane after a midair doesn't end the match. Mixing the two has undesireable results.
I agree with Paul and Brad. Allow starters, but only if a pit crew doesn't get a fast start, they have to hand flip at least a couple of times. But don't require the pilot to start. It's too easy to get over excited and trip over the lines with someone running in and out of the circle. Requiring the pilot to do the restart makes it even worse and virtually guarantees a guy having to restart will lose on air time.
You kinda have to think through what kind of matches you want to see. Short, fast, dramatic ones with a kill, or longer, slower ones with mulitple cuts. Or maybe short, brutal matches decided by a few seconds and with both planes broken. How the rules are written mostly determine how the matches go.