This idea is very good but the problem is that everyone with out fly would use the no fly arena, then the people with fly would have to use the no fly arena to get kills making the fly arena totally pointless.As well as this pvp is hardy full without splitting the people in two arenas
The thing is, this might bring more people to pvp. I know that as soon as the flyers show up, many people ditch because it's just not a fair fight. Not to mention, I usually only see the same 3-4 people abusing fly in the arena. Losing those fighters in the non-flying pvp arena isn't going cause any huge loss in how full the arena gets. As I see it, this would be the best compromise so that people with fly can keep their fly in an arena, while those who don't like to use it or just don't have it, have there wants satisfied.