* Downtrend has bottomed out - senior Asia-based executive
* Cargo traffic seen picking up first
* Outlook more bullish than Airbus, Boeing
* Still difficult to forecast rebound in sales
* Targeting China market, in talks over CSeries jets (Adds details, quotes)
By Sui-Lee Wee and Joanne Chiu
HONG KONG, Sept 9 (Reuters) - Bombardier Inc, the world's No.3 commercial aircraft maker, expects airline traffic to record modest growth for the rest of the year, with cargo leading the way in the recovery, a senior executive said on Wednesday.
The Montreal-based firm hopes to see fewer aircraft deferrals as traffic levels return and airlines are faced with less pressure to cut capacity, Trung Ngo, vice-president for sales in Asia-Pacific, Bombardier Commercial Aircraft, told Reuters in an interview.
Bombardier, like other aircraft makers, has faced requests for delays in aircraft delivery from airlines hit badly by high operating costs and weak air traffic demand as a result of a weak global economy.
"We've bottomed out with the level of negative growth," he said. "As we go forward, in the next period we can see a resumption in modest growth in the airline industry."
Cargo traffic is expected to pick up first, as manufacturing activity recovers, Ngo said.
Bombardier's outlook is more bullish than earlier guidance given by its peers Airbus and Boeing. Airbus expects a recovery in total passenger traffic volume by 2010, while Boeing only sees a growth in aircraft demand in 2012.
(For earlier stories on Boeing and Airbus, click on: and)
Still, Ngo said that while the decline in airline traffic has stopped, it was difficult to forecast a rebound in sales.
"There's a lag between aircraft orders and profitability, we have to wait for the profitability of the airlines to come back," Ngo said, adding that airlines' yields have remained low due to passengers shifting from premium to economy class.
Fuel prices are also a concern, Ngo said.
"If we see a spike, everything will be subject to change again," he said.
Bombardier is in talks with Chinese airlines for its CSeries jets, Ngo said, but declined to provide more details.
Over the next few years, China would be a key market for Bombardier, accounting for 17 percent of total aircraft demand for the next 20 years, he said.
"We want to capture the next replacement cycle in China," he said. (Editing by Simon Jessop)