Analysis: Ryanair has taken a hiding and its tough talking chief executive, Michael O'Leary, knows it should brace itself for a few more blows in the days and weeks ahead, writes Siobhan Creaton.

The meltdown was sparked after the cheeky low-fares airline, which has delivered spectacular growth every quarter since it came to the stock markets in 1997, issued its very first profits warning.

Investors quickly sold off the stock believing Ryanair's spectacular growth story may have ended.

Some investors were also smarting at the fact that members of the Ryan family, who founded the airline in 1986, had sold 6.4 million shares at €6.90 a share just over a fortnight ago, pocketing €44.2 million.

It's been a very bad week for Ryanair.

On Monday, Mr O'Leary and his team were in Brussels trying to decipher the outcome of a European Commission investigation into the subsidies and financial incentives it received at Charleroi airport, south of Brussels.

Based on their discussions, they claimed that the Commission was about to hand out the worst possible ruling, which would not only require the airline to repay the millions of euro it had received in illegal subsidies but could also force it to renegotiate the deals it had with other airports.

Yesterday, Mr O'Leary ranted about the "Eurocrats", claiming they were trying to impose a bizarre, unworkable, communist-type model across Europe's private and publicly owned airports. He would see them in court, he warned.

Ryanair's competitors, who were enjoying his discomfort, began to talk about lodging a claim for compensation against the airline.

And for the first time since he took over as the public face of Ryanair in 1994, Mr O'Leary was asked if he should consider his position?

News that Ryanair's profits for the 12 months to the end of March will be €215 million rather than €239 million, some 10 per cent below expectations, came as a huge disappointment.

The airline insisted its profit margins remained among the highest of any airline in the world and that its winning low- cost formula remained intact.

It just hadn't foreseen the extent to which it would have to slash its air fares when competing head-on in markets across Europe.

When speaking to analysts, Mr O'Leary professed to not fully understanding the scale of the decline in air fares. However, he went on to signal that they could fall by a further 20 per cent this year.

He pointed the finger of blame at other airlines, accusing them of "dumping" cheap air fares in a bid to clip Ryanair's wings.

Of course, Ryanair has been doing a fair bit of dumping itself since it started carrying larger numbers of passengers on its new higher capacity Boeing aircraft as it flexed its muscles, particularly in Germany and Italy.

It is possible that the airline may have been a bit too aggressive and underestimated the scale of its rivals' retaliation.

Ryanair may well be exaggerating the impact of the Charleroi ruling on its business as part of its efforts to negotiate a more favourable outcome for itself in Brussels.

Its competitors will be amused to hear that Mr O'Leary is also concerned that the 'Eurocrats' could damage their business with their crazy rules.

The Ryanair boss will have to work tirelessly over the next few days and weeks to reassure shareholders that Ryanair's growth has stalled rather than peaked.

And while it will be another week before the full implications of the Charleroi ruling become clear for Ryanair, it is now certain that the Irish airline's low-cost model now faces fresh challenges.