I guess it would depend on the market. London-Berlin might make more sense by air. Lisbon-Athens would definitely make more sense by air. There have been some successful discount airlines like Ryanair that have carved out a loyal following.

It will be interesting if the night sleeper trains can make a go of it. They were pretty much phased out years ago due to low patronage. One has to wonder if the books are being "cooked" to make them look like they're performing better financially than they actually are.