* Broad European data highlights weak air freight in May
* No relief in sight, aviation groups say
* Contrasts with French and Italian economic data
By Pete Harrison
BRUSSELS, July 10 (Reuters) - European airlines witnessed another bad month of freight volumes in May and there are few signs of an upturn, two aviation groups said on Friday.
The latest gloomy outlook contrasts with French and Italian figures showing industry performed better than expected in May, fuelling hopes that the worst of the crisis may be over.
Economists watch air cargo volumes for signs that destocking of inventories, which had depressed global freight volumes along with a severe squeeze on trade financing, may be winding down.
"May was another catastrophic month for air freight, which posted a 19.8 percent decrease" year-on-year, said the Association of European Airlines (AEA), which represents 33 carriers including Air France-KLM and British Airways.
"Several AEA airlines have seen their cargo volumes cut by one third or more," it added.
The group said passenger numbers fell 8.3 percent in May compared with a year earlier, with preliminary figures for June indicating a slight improvement.
"There is no relief in sight, however, in the air freight market," it added.
Airports body ACI Europe said freight dropped 20.1 percent year-on-year in May at the 105 airports it surveyed, a slight improvement on April's 25.4 percent fall.
The group gave no figures for June, but its director-general Olivier Jankovec last month told Reuters he forecast 2009 freight would be down 16 percent on last year.
In a rare but still fragile note of optimism, Frankfurt's airport operator said the decline in passenger traffic had slowed to 5.6 percent in June as demand continued to recover gradually from the economic slump.
"The recovery trend accelerated particularly toward the end of the month when the summer vacation period began in several German states," operator Fraport said.
Airfreight traffic contracted 16.5 percent in June and was off 21.5 percent in the first half of the year.
Fraport said on Thursday it has become slightly more optimistic about 2009 after the slump in passenger traffic decelerated in June.
It now sees a full-year decline of 8 percent as the worst-case scenario.
Germany said on Friday its economic slump may have reached a bottom.
French industrial output jumped 2.6 percent in May, easily beating expectations for a flat reading. Italy's output was flat but bettered forecasts for a drop of 0.6 percent.
The reports followed data from Germany on Wednesday showing output growing at its fastest rate in 16 years.
Economists said the reports from the euro zone's three largest economies were encouraging but cautioned against declaring a recovery was underway.
Eurozone industrial output is due Tuesday. Analysts are expecting a 1.2 percent rise in May after a 1.9 percent drop in April, according to a Reuters poll.
For a story on what other aviation groups are saying about traffic developments click on (Additional reporting by Michael Shields, Anna Willard, Editing by Dale Hudson and Tim Hepher)