(...) flying is very obviously a big-city thing. Inhabitants of big cities fly much more because (...)" etc..

... assuming there is an alternative. If there is no viable alternative infrastructure other than the airport, you get a flight.

In general poor people fly very little, which is also the case in Germany (...)

I already addressed this. Quote: "The poorest are already not travelling, sure, but making travelling even more expensive is going to stop a whole lot more people from doing it."

Making prices higher naturally incentivizes other transports, when those exist. If flight prices increase by much I'll just... mostly stop going anywhere honestly. Ironically, I'm not "poor" by portuguese standards. I just earn around the average portuguese salary - which is below minimum wage in all neighboring countries. Do only the poorest of the poorest count?

Portugal is itself mostly responsible for its transportation network and (...)

It is, in part, if we ignore European obligations often forcing our hand. It should still not be France mandating minimum prices across all of Europe, which is what the article we're all talking about mentions.

Trains (and transport infrastructure in general) are actually one of those cases where smaller countries get shafted - not on purpose, but by the sheer size of the country and their economy - mostly because of having less budget to work with. We're often paying outside companies to build our train infrastructure and the trains themselves, paying their prices adjusted for their salaries and costs - which ends up ridiculous for us. That doesn't happen with roads, which was why roads were often the focus of large infrastructure spending in Portugal - we could do it with national companies paying national (very low) salaries - so costs were fairly low in comparison to train infrastructure. And those investments mostly happened 20/30 years ago, when trains weren't really all that popular. Since then we've mostly made on investments on anything really.

A great example is the - supposedly - soon to be portuguese TGV. The government has already basically admitted that the construction costs for the whole thing will be large enough that it'll be impossible for the state to cover it, so it'll mostly end up being done with public - private partnerships. The arrangement will likely involve private companies assisting the state in paying for the whole thing, in exchange of the state having to pay a fee for around 50 years for every train that crosses certain parts of the line. The state will then pass on that cost to train operators - TL:DR, tickets will probably be very expensive for the first 50 or so years to account for that.

While just looking at the cp website it seems that prices are pretty low compared to germany or france. Similarly for hostels it seems porto and lissabon are cheaper than many less touristy cites like lyon, toulouse, cologne, genoa, … right now.

Prices for trains are only "cheap" if you look exclusively to suburban trains which only cover territory around Porto and Lisbon. Look at intercity or regional trains and the prices suddenly get much higher. And that's without adjusting for salaries. Only 15% of portuguese make the equivalent of the French minimum wage (post-EDIT - actually even less, I didn't know the minimum wage in France had increased). If you look at stats for young people alone, only 3% make over that (https://poligrafo.sapo.pt/fact-check/apenas-3-dos-jovens-em-portugal-ganham-mais-de-1600-euros-por-mes). Account for the salary difference (even without counting taxes) and portuguese transport prices become much less friendly.

I just can’t imagine it being cheaper to fly outside of portugal for vacations based on those prices.

It is. I'm not going the extra length to prove it to you considering I've spent my life min maxing for prices every vacation I took, but if you want compare going from Porto to Lisbon, staying in Lisbon and returning for a weekend in october, for example, versus Madrid, for example. You can do the same for a lot of smaller european cities. It's ironic in a way, but I hardly know Lisbon.