Planes have certainly progressed in the last 40 years, but, the improvements have generally been of economical/cost savings measures.... better fuel efficiency being the main driver.
The 40 years before that, planes saw exponential growth in terms of progress ..... So comparing the last 40 years, with the 40 before that, it would look like things have been standing still for 40 years.
Now, if you compared cars over the last 40 years vs planes, I would say that cars have had much more significant changes.
Many current generation 4 cyl cars have similar or better acceleration/performance of 8 cyl cars from 40 years ago, with much better gas milage, better cargo capacities, more comfort, and immensely improved safety.
Now, IMO, the challenge to improve some things on a plane is MUCH more difficult, and not fair to compare to a car. For instance, safety .. when a plane crashes, they pretty much always hit the ground at over 200mph, and in most cases, everyone dies. Even if you made the cabin 3 times as sturdy and magically fireproofed.... the Gs alone from smashing into the ground would often mangle up all the passengers beyond any chance for life ....
With road vehicles, airbags, crumple zones, better seat belts, etc have all contributed to survivability .... your chance to survive a head on wreck may have gone up from 50-90% With planes ... you make the same amount of improvements, and you likely will go from 0% to 0% .....
So, depending upon HOW you measure progress (by the improvements made, or by the measureable amount of result due to the improvements made?) .... you will come up with very different answers ... Thus, I suspect both you and your friend are wrong!