I now live in Sussex (near to Hastings) and by the time I drive to Gatwick (it's quicker than the train on that line), park, check in/loose luggage and get through security, fly to Newcastle, get luggage, get metro into city centre etc I have worked it that it all saves me 25 minutes as opposed to taking the train.
You also have to remember that employers are cutting budgets but at the same time becoming far more interested in the environment. In my organisation if I do fly then a £30 surcharge is put onto my budget to offset the carbon emissions and I understand we aren't the only large company to do this. Also, in terms of efficiency you can work the majority of the way on the train - employers are demanding far more of their employees at the moment and don't want to think that they are 'wasting time' when travelling.
You also need to consider that the vast majority of the country's business is done in central London - in which case the train will win everytime, especially from the NE.
What you need is a significant leisure market and those all important long haul transfers to make a MME - London air route work.