An air-line railroad was a railroad that was relatively straight, following a shorter (and thus, presumably quicker) route instead of a longer, winding route.
In their heyday, which was prior to aviation, they were often referred to simply as "air lines".
Air line railroads began to be built in the mid-nineteenth century.
As early as 1853, the New York Daily Times ran a satirical article mocking the trend, suggesting that the fad for an "air line" name was being used to float dubious investments: When actual air travel began in the United States, the older usage of the phrase "air line" led to confusion.
During a spate of interest in aviation shares on Wall Street following Charles A. Lindbergh's trans-Atlantic flight in 1927, Seaboard Air Line shares actually attracted some investor curiosity because of the name's aviation-related connotations; only after noticing that Seaboard Air Line was actually a railroad did investors lose interest.