He supports privatizing airports and airliners (both already are so I'm not sure what he's on about) and the 'airways' (presumably he wants to abolish the FAA?). He implies that government intervention in air travel can't make us more secure. It's pretty clear what his solution is, and it isn't a well-regulated air travel industry. It's a not-regulated air travel industry, or nearly so.

Some might object that private firms will have incentives to cut corners on safety. It is a legitimate concern, but competitive mechanisms tend to weed this out.

He's not talking about regulation here. He thinks solid airline security will just happen.