A sword air combat wouldn't work at all. If it come to have some air combat it's most likely to be projectile only: Bow, Slingshot or some exclusive Bird weapon. And yet it would be quite awkward, flying with the mote aiming with analog? Sounds terrible. Maybe some kind of auto-aim/lock-on, but sounds kind of messy as well. I can only think of the "Pew Pew" gun in the Wii Sports Resort, that would work fine, but the A and B button are already mapped...
But since they created that Air Jet like hud system, displaying the position of other birds, they will probably be re-using frequently (that's just the way Nintendo works), so there are probably going to have lots of races and pursuits, to say the least.