Navigational challenge is something to be made on street/dirt illegal racing games, flight simulators or naval simulators. Alternatively on puzzles in action or outright puzzle games. This is neither of these, not even close.

As for immersion...how does that suffer?! I mean, do people stop being immersed in their real life if they get onto their personal little planes or helicopters and fly to the neighboring town instead of going there by foot? Of course not. If anything, it's the exact opposite. Why would it be any different in the game so long as the mounts that fly are properly designed. A griffin, giant bird (Yol) or dragon does not interfere with world immersion. An oversized elephant that runs on air no different than it does on ground does.

Immersion depends on the believability of the world and its general esthetics. It is broken by developers by introducing ridiculous glamour options, crappy flight animations for mounts that have no place being in the air and foolish quest designs choices that completely ignore in-world conveniences just to make the player go out of their way to do something. All those cases where players are supposed to escort an NPC and then they go all "I'll go ahead and meet you there." are ruining immersion as well, because how is that escorting? These things ruin immersion and they are in the game since day 1, constantly repeated time and again.