European airlines have reported strong demand for the coming year, but supply chain constraints have led to higher costs and maintenance delays.

Ticket sales were high, helping push up revenues 14% year-over-year to 30 billion euros ($32.50 billion) in 2023. The operating margin for 2023 rose to 5.7%, up 1.2 percentage points year-on-year. But a scarcity of spare parts and a shortage of engineering labour has proved challenging for the group.

Still, Air France-KLM was able to pay down 1.3 billion euros ($1.41 billion)in debt, much of which was amassed during the pandemic travel shutdown, with an outstanding net debt of 5 billion euros ($5.42 billion).

"We can be satisfied of our efforts to further strengthen our balance sheet and restore the Group's equity," Chief Executive Ben Smith said in a statement.

The war in Israel as well as disruption costs hurt fourth quarter results in particular, the company said.

($1 = 0.9230 euros)

(Reporting by Joanna Plucinska, editing by Deepa Babington)

By Joanna Plucinska and Diana Mandia