That's the beauty of private enterprise. They can do the same things as an authoritarian government without any of the anti-authoritarians being able to make their claims. The end result is the same and it's even harder to stop. Any claims that airlines will compete on not having a private no-fly list are baseless. It simply won't be a point of product differentiation.
Yeah, the counter argument to this never made any sense to me "It is a private company, they can do whatever they want". Yes, within reason. When private enterprises collectively act as a proxy of authoritarian powers, something is deeply wrong.
In the case of actual convicted criminals, our existing justice system can already limit flying as a condition of probation or parole.
Why is this needed?