Eat my shoots. A month ago Tony Tyler, chief executive of Cathay Pacific, swatted away concerns over a rights issue by telling analysts that things had stopped getting worse. Traffic figures for June, released on Monday, tell a different story. Passenger numbers fell the most, year on year, since the peak of Sars. Even with big capacity reductions, load factors weakened further. Don't even ask about premium, about two-fifths of total revenues.

Mr Tyler cannot be blamed for misreading the outlook, or for trusting faulty forecasting tools. Even so, it is time to ask the awkward questions again. Does Cathay need a recapitalisation? And could its shareholders be relied upon to back it? Swire Pacific, the largest holder with 40 per cent and manager of the airline, would presumably deliver the goods. But Air China, holder of 17 per cent, is living hand to mouth. Citic Pacific, with another 17 per cent, is still shaking off a record annual loss as it refocuses on specialty steel, iron ore and Chinese real estate.

There would be something absurd about Cathay, a company with net debt to equity of about 100 per cent, tapping up Air China, where the ratio is about 250 per cent. But the facts are uncomfortable. Cathay's gearing is more than double its own 20-year average, at a time when operating metrics have rarely been worse. A succession of regional peers – including Qantas, ANA and Malaysia's AirAsia – has raised equity in recent months.