Cargo traffic growth for European airlines slowed down sharply in March, expanding only 1.5 percent in a new sign that rising jet fuel prices are cutting into international air freight shipping.

The increase reported by the Association of European Airlines was the lightest expansion in eight months and a sharp pullback from the 7.2 percent gain European carriers showed in February.

Air trade in March with Asia - the largest market for European carriers - was flat with the same month a year ago. Traffic over the North Atlantic, which has been bolstered by growing U.S. exports, was up 3 percent.

Several air carriers have reported a slowdown in air shipping demand as jet fuel prices have soared as high as $3.70 a gallon in some markets, more than double the price at the start of 2007.

Global forwarder Panalpina recently reported that its air freight volume grew 4 percent in the first quarter while ocean volume was up 14 percent.