[Jack Simth]

You also lose whatever the plane happens to crash into, of course (commonly a field, forest, or suburb).

a) It would work on one front for a little while. Yes, you would cut down on terrorist attacks, until they started basing themselves elsewhere. You know, fairly populus areas, under the "control" of people that can't do much about the area, surrounded by lots and lots of civilians. Sure, you could still try it... but that just makes (b) much worse:
b) You're going to anger a LOT of people doing this. Seriously. A LOT. Entire countries, along with their militaries. You're wiping out an entire city to get at... what, one or two hundred people? Who will probably catch on, and move between when they train up the person on the suicide mission and when that person actually goes on the suicide mission. You will have 0 sympathy after the first such strike you make.

My advice? Arm the populace. Entirely. Every man and woman old enough to be drafted (assuming, of course, that women could be drafted). Train everyone in the proper use of firearms (including storeage; distribute lock-boxes and proper belts/holsters as well), and encourage them to be carried everywhere (including airplanes). Stress the reason for this (strangely, it doesn't evem need to be true, as long as the untrustworthy can be convinced of it.....): Most citizens are trustworthy about anything important; it is every citizens' duty to help defend the country when the need arises, and every citizens' right to defend themselves against illegal lethal threats. Tell me, how do you hijack a plane by force when you're outnumbered a hundred to one by people who know that your victory means not only their deaths, but the deaths of hundreds of others, and everyone's armed?