St. Paul speaks of the devil as the prince of the power of the air. That's a reference to demons being "in the air", a borrowing of Hellenistic language about daemons. In Hellenistic religion a daemon was any divine or subdivine entity, good, bad, neutral. The notion of there being intermediary quasi-divine spirits or "daemons" in the air was part of the Greek world. Judaism appropriated the word daemon to speak of evil spirits, and interpreted the divine and subdivine things which the Greeks believed in as "demons" that is, evil spirits. Hence the New Testament's use of the word daemon (demon) to refer to rebellious evil spirits whose prince is the devil/satan.
As such, St. Paul speaks of the spirits of the air as demons.
That does not mean that demons literally inhabit the atmosphere of the earth.
The reason why I dismiss the notion that the Bible is talking about space ships as stupid is because it is. I don't believe it has any merit. I place that in the same category of ideas such as John Allegro's theory that the New Testament isn't about an historical person named Jesus of Nazareth, but is specially coded language about a first century cult centered around the use of psychedelic mushrooms. No,
I'm not making that up.
Not every theory, not every idea, is equally deserving of being taken seriously, or regarded as having merit. Sometimes calling something ridiculous is sufficient, because giving something legitimacy only bolsters such silly notions.
-CryptoLutheran