His chances are not totally over. If your DS applied to his state senators, then he has a chance there. Also, if the Academy really likes him, it is possible, although rare, to get a nomination from the Vice President or the Superintendent. If you are not offered an appointment to USAFA, but the Academy thinks you have potential, you could get a USAFAPS (Prep School) slot or a Foundation Prep slot. Foundation Prep is where you attend a Military Junior College aka Civilian Prep School and your tuition is paid for, although I don't know if all of it is covered. You do not need a nomination for either Prep School or Foundation Prep. USAFAPS is located at the Air Force Academy and Civilian Prep Schools are located throughout the country. If your son makes the grades, doesn't get into trouble, and keeps fit, then he should get an appointment the following year. Keep in mind that most of these slots go to recruited athletes and URMs.
If either of these options doesn't work out for your son, here are some options:
1. Has your son applied or planning on applying to USMMA? It is unlike the rest of the military academies, but your son can go into the Air Force out of USMMA. You have your choice of Active Duty, Reserve, or Air National Guard too. Pilot slots are possible as well. However, if your son does not have an interest in shipping or going to sea, then this might not be the place for your son.
2. Look at which schools on your son's application list offer AFROTC. You can still work towards a commission in the Air Force and you can get an ROTC nomination to USAFA if your son decides to re-apply if he does not get in. As it turns out, some of the cadets/mids on here who are in ROTC were turned down by a service academy, and when it came to reapplying, some did, and others decided that ROTC was a better deal. You never know, maybe your son will like ROTC a lot.
3. There is Officer Training School for the USAF. This program is for college graduates and it pretty much officer boot camp. You get commissioned at the end and serve like any other officer would. OTS is pretty competitive.
4. There is also the enlisting and re-applying option. Some have done this. It is a different process, and I would not recommend enlisting just to try to get into the Academy. You have to get through Basic, Tech School, and then prove yourself to your Chain of Command.
One last piece of advice:
Your son's primary goal is to become an Air Force Officer. I still really value his desire to attend the Academy (I am applying to USNA, USCGA, and USMMA myself). Some people lose sight of the other commissioning opportunities. I am sure your son would be a great Air Force officer. While not getting a nomination might be the end of the road now. It is not the end of the road in the long run. He can re-apply or commission through another program. All have and continue to produce great officers. Remember, once your son gets out, it doesn't matter how he got commissioned, but what does matter is how good of an officer you are.
I wish you and your son much luck! I hope this helped.