So the new giant is finally with us: air travel is transformed for ever, and we’ll all be flying super-luxury super-jumbos from now on, will we?

Not necessarily. There’s a battle going on in the skies, the results of which will have a radical effect on where we can fly, how comfortably and for how much.

The war is being waged between the world’s two mass-market aircraft builders: Europe’s Airbus and the American titan Boeing. They had very different visions of what we would want from a plane, and each bet billions that their guess was the right one.

Airbus has been thinking big.

Its A380 is based on a simple premise. More people are travelling by air, so takeoff and landing slots are running out. The solution? Build a bigger plane to carry more people, without needing extra slots.

Enter Boeing, with a radically different philosophy. Where the Airbus approach is all about flying between big “hub” airports, the American company thinks more of us will want “point-to-point” services – direct routes between smaller airports.

Say you live in Birmingham, and you want to go on holiday to the theme-park capital of the world, Orlando, Florida. Follow the Airbus approach and you’ll have to schlep to Heathrow to catch an A380, which will probably go to Miami – more messing about at the other end. Lots of hassle and cost. But Boeing’s smaller long-range plane could fly direct – a much more attractive proposition.

Boeing’s interim solution was introduced last year – the 777-200LR Worldliner. It carries 300 or so passengers and, boy, it can take them a long way. A test flight in 2005 went from Hong Kong to London. The long way round. The world-record-breaking Worldliner is, however, something of a stopgap – Boeing’s philosophy will really be put into practice with an entirely new plane, the 787 Dreamliner. It still has that point-to-point idea of smaller planes (the 787-8 is expected to carry about 250 people) going long distances (maximum range: 9,443 miles) – and so can avoid troublesome hubs and fly direct to smaller, more convenient airports. But there are high-tech innovations to make us more comfortable, too.

The plane is built mainly of composites, which don’t corrode – with the handy result that cabin humidity can be increased, so we won’t get so dehydrated on board. The air pressure will be higher too, which should improve comfort. Also promised: air filtering to remove ozone and bacteria, glareless LED lighting, a quieter ride, and bigger windows with a revolutionary material in the Perspex that allows you to change the glass from clear to black at the touch of a button.

The Dreamliner hasn’t got off the ground yet: a test flight is expected in the spring, with the first paying passengers getting on board in December 2008. But in a few years, lots of us will be flying on them. Boeing has received orders for more than 700, including 24 for British Airways, 12 for the tour operator First Choice and 11 for Thomsonfly.

So, will we all be flying between mega-airports on mega-planes, or provincial cities on smaller long-haul planes? Probably a bit of both. But there’s one thing all these new-generation aircraft have in common. Modern design and technology means they should be more efficient, using 15-25% less fuel than the older models. Which should mean cheaper fares, shouldn’t it?

Probably not. “Fuel prices are rising even faster than aircraft efficiency,” says Tony Dixon, the editor of Airliner World. “It’s fair to say, though, that without those efficiency improvements, fares would be going through the roof. And, of course, they’ll create less pollution and lower carbon emissions.”

WHAT COMES after this plane race? They can’t make them any bigger, surely. Or smaller. The answer is ... space.

Next year, Virgin Galactic (www.virgingalactic.com) will unveil its final designs for a suborbital passenger craft, known as SpaceShipTwo (SpaceShipOne having proved the idea works), to be launched from the back of a mother ship for a dash into space. It will be capable of taking anyone willing to pay £97,600 for a 2½hr trip 140km above the earth (the rest of the galaxy officially starts at 100km) and offer 5-10 minutes of weightlessness and stunning partial views of the earth (it doesn’t go into actual orbit, just pops into space for a quick peek and comes down again to land like a conventional plane).

It carries six people and the maiden flight is due to take off from the Mojave Desert spaceport sometime in 2009. Although the first 100 places are gone (to the likes of Richard Branson and family, Professor Stephen Hawking and the actresses Victoria Principal and Sigourney Weaver), you can still book through the website to be in the second tranche. All you need is a £9,760 deposit.

Will Whitehorn, the president of Virgin Galactic, is adamant there is more to this than rich folks’ joyriding. “The same technology can also be used to launch satellites into low earth orbit at a fraction of the conventional cost. That will be the first practical use. But beyond that, we know we have to change the way we travel around the planet. And the system we use has far less impact on the environment than, say, the shuttle. When it goes up, it has the same carbon footprint as the entire population of New York City for a long weekend. SpaceShipTwo will carry people into space for less than the impact of one business-class ticket from London to New York. Out of SpaceShipTwo, we believe, will come the technology to move people around the earth in lightweight composite craft without burning fossil fuels inside the atmosphere. That’s our vision.”

And how safe will it be? “Virgin Galactic won’t work unless we and the public are sure about the safety aspects. That, as with air travel, is paramount.”

So, how long will we have to wait? Virgin reckons on daily flights to space from spaceports in California, Sweden and Scotland within six years from the first launch, at a cost that will drop to £37,500.

Whitehorn won’t be drawn on a date for when we can fly from London to Sydney at Mach 3 on a sleek spaceship made of high-tech plastics. “But it will happen,” he insists. “In the long run, it has to.”

Times recommends

• Oasis of the Seas: the Times review
• The 20 best new year party places to stay
• Green Spaces 2009: are you the winning writer?