What's going on?

Irish budget airline Ryanair � Europe�s second-largest carrier by passenger numbers � saw its stock dip by 6% on Monday as it suffered a 20% drop in profits in its second quarter.

What does this mean?

It�s all gone wrong for Ryanair: staff strikes have spurred a spate of flight cancellations (the worst week of stoppages in its thirty-year history) and the summer heatwave engulfing Europe has meant people are happy to sun themselves at home rather than seek warmer pastures. Rising oil prices have pushed the company�s fuel costs up nearly a quarter over the previous year, squeezing the gap between how much money it brings in and how much it has to spend � a.k.a. its profit margin.

 

Why should I care?

For you, personally: This is your captain speaking.

Rising demand for pilots is forcing Ryanair to boost wages, treat them better and finally recognize employment unions (which fight for workers� rights) � so if you ever wanted to be a pilot, now�s a good time. It costs $130,000 and takes two years to get a license, but you�ll be up for an average annual salary of $100k (if you�re flying big jets). Ryanair�s been paying up to attract pilots and it�s starting to affect its bottom line.

The bigger picture: Budget or die.

Europeans are used to getting from London to Switzerland, Germany, Denmark and France for less than �10. The budget carrier airspace is ultra-competitive in Europe, and Ryanair might struggle to raise its fare prices much � i.e. enough to cover its higher expenses � as passengers can just go elsewhere. However, Ryanair�s competitors are facing troubles of their own: Air Berlin filed for bankruptcy in August and the UK�s Monarch ceased operations last fall, leaving 110,000 passengers temporarily stranded overseas (who were ultimately brought home in the biggest-ever peacetime repatriation).