To be fair he did address this question, and the similar one with Beauvais Marseilles versus TGV. The train was twice the price and he claimed he was attracting a different type of pax. You can work on the train and comfort is at a premium of older, wealthier more business orientated pax. He claimed he could still compete. We shall see.
Spanish Railways in the shape of Renfe and AVE are actively competing with the airlines. In part this has been encouraged by the EU who have funded high speed railways in Spain in order reduce the number of internal flights and thus the carbon footprint, as well as provide a viable trans-European HST freight structure. Most AVE intercity fares now match or undercut the equivalent air fares.