This is all around a much better system than FIFO. Of course LIFO is the fastest on average, but you want there to be a reasonable, predictable bound on how much time an individual can expect to wait. An extension of this policy could be "partially random first come first served", where you just start at the first person in line and flip a coin with probability 0 <= p <= 1 of getting heads, and if you get heads they get served. If you get tails you move to the next person, with the only exception being the last person in line.
In practice, for airports I would prefer to have the people sitting in the back board first. Then you wouldn't have so much congestion from people blocking the aisle while they stuff their bag into the overhead compartment. Also you shouldn't have to sit in your seat longer for the same flight if you bought a first class ticket.