A resposta para isso está na página 196 do PHB.
Using Different Speeds
If you have more than one speed, such as your walking speed and a flying speed, you can switch back and forth between your speeds during your move. Whenever you switch, subtract the distance you've already moved from the new speed. The result determines how much farther you can move. If the result is 0 or less, you can’t use the new speed during the current move.
Assim, no caso do Dragão Vermelho Antigo, ele pode se mover até 80 pés a cada rodada, subindo para até 40ft caminhando ou subindo ou voando (ou qualquer mistura deles) e movendo o restante voando.