Domestic air passenger traffic crossed the 10-million-mark for the first time in India during May 2017, ratings agency ICRA said on Tuesday.

According to an ICRA note, the growth in passenger traffic was achieved as a result of peak season demand, whereby the passenger load factor (PLF) for the domestic aviation industry touched a new high of 88.9 per cent.

"Moderation in supply growth, peak season demand and sequentially stable ATF (air turbine fuel) prices augment well for the financial performance of airlines in Q1 FY2018," said Anand Kulkarni, AVP and Associate Head, Corporate Sector Ratings, ICRA.

"Indication of softening of fuel prices in Q2 FY2018 is also a positive for the industry. However, supply is likely to remain high going forward, considering the large order backlog of Indian airlines and the same might impact yields."