The more than 25 per cent collapse in Ryanair's share price over the last few days should not be interpreted as a harbinger of the budget airline's demise.
That said, some very serious questions have been raised about the company's famed low cost business model which, until last Wednesday, had produced 26 consecutive quarters of rising profits and propelled the airline into the top slot in Europe.
Ryanair appears to have grown too quickly and to have fallen victim to the simple rules of the market, finding itself no longer able to fill sufficient seats at the prices needed to produce increased profits. The solution - at one level - is equally simple. The rate of expansion will have to slow and the company's already trim cost base will require further scrutiny.
However, the chances are that things will get worse before they get better as the company acts to match supply to demand. Further bad news is ahead next week when the European Commission is expected to confirm that the deal cut by Ryanair with Charleroi, the airport used by the airline to service Brussels, is illegal in some respects, raising the prospect that some subsidies will have to be repaid. This, in turn, will have implications for similar deals elsewhere and will increase the airline's costs.
In addition, competition from numerous copycat airlines springing up across Europe will eat into bookings this year. Although few of Ryanair's small rivals are expected to last the pace, they will continue to be an irritant for the foreseeable future.
But even at its nadir Ryanair will remain the most profitable airline in Europe, with profits for the year to March expected to be €215 million, even when last Wednesday's news is factored in. It will remain also the single most successful exponent of on-line booking. Add to that turnaround times which remain the envy of its competitors and a cost base which is the lowest in the industry.
While the situation confronting Ryanair is not ideal, the future is far from bleak. Assuming that there are no other surprises in the offing, it should retain its pre-eminent position in budget aviation, albeit with a lower level of profitability than it has demonstrated to date.
The stock markets will remain nervous in the short term and one of the many immediate challenges for the airline is to rebuild the confidence of investors in its business strategy. The company's management will be allowed a limited amount of time in which to show that it can fix the problem.
In this context it is pertinent that questions have been raised for the first time over the future of the company's bombastic chief executive. Michael O'Leary has brushed aside any suggestion that he might step down and has expressed characteristic relish for the coming fight. Given Mr O'Leary's impressive track record and the lack of any clear alternative, it is not the time to change pilots at Ryanair.