Many people who fly on airplanes do not like it one bit.  Some of these are claustrophobic while others object to the fact that they are not allowed to smoke at 37,000 feet anymore. But, the majority of nervous flyers have anxiety based on their belief that nothing that weighs any number of tons should be able to operate off of the ground at all. To their way of thinking, flying is a physical impossibility which they tolerate because driving from New York to Los Angeles takes five or six days.

The tens of millions of people who do not want to ride on airplanes are getting their way. The recession has hit the airline industry with a rapidly growing attrition of customers. As a reaction, carriers are taking planes out of service as quickly as possible and letting go as many pilots, stewardesses, and mechanics as they can. People who do not want to fly can join those who do in not being able to afford it.

Investors who own airline stocks have seen the shares of some of the largest carriers drop by more than 80%. The speculation that two more large American carriers will have to merge to save money has resurfaced for the first time since $147 oil drove up jet fuel costs last year.

The damage from the flying public staying at home has claimed another large victim—Boeing (BA), which only a year ago had business prospects that it would have been proud to set side-by-side with those of any other large American company. Boeing was an $87 stock last May. It trades for $39 today.

Boeing’s stock is going to fall a lot further, but not for the reasons that analysts had guessed. The impression among investors who follow Boeing is that boneheaded management had allowed poor labor relationships and a slowdown in the launching of the company’s new 787 flagship, which has been set back by well over year, to undermine the tremendous demand for the firm’s planes.

Boeing is one of the rare instances where the incompetence of its executives is not what is bringing the company to its knees. Good management is supposed to count for a great deal, but, under market conditions which are deteriorating quickly and over which a company has no control, a spider monkey can be at the helm.

Even if Boeing had gotten the 787 out of the hanger on time, it would have taken years to fill the company’s backorders. The cancellations which began recently would have overwhelmed Boeing’s capacity to hit its sales goals. All of the delays and all of the labor unrest showed that the people who ran Boeing were not qualified to run Boeing, but it ended up making no difference.

Boeing announced that its first quarter numbers would be poor. According to Reuters, “Because of the drastic dip in demand, Boeing said production of its 777 minijumbo will fall to five from seven per month beginning in June 2010.” In other words, earnings from Boeing are going to be weak for a long time.

Incompetent management cost Boeing its reputation on Wall St. A collapse in demand for its airplanes will do a good deal more than that to hurt shareholders

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