WRAPUP 1-Air freight down 20 pct, outlook grim

* 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 (AIRF.PA) and British Airways (BAY.L).