Troubled African budget carrier Fastjet trimmed annual losses last year as revenue and passenger numbers increased but warned that it would remain in the red in 2016.

Executive chairman Colin Child described 2015 as a year of “change and challenge” for the carrier backed by easyJet founder Sir Stelios Haji-Ioannou.

The airline’s chief executive Ed Winter and general counsel Krista Bates were ousted in March after Sir Stelios announced that he had “lost faith in the management and current board”.

Fastjet today revealed that a search for a new chief executive was “well advanced”.

But the airline warned that a seasonal increase in passenger numbers experienced in past years during the first quarter had not occurred in 2016 reflecting a “prolonged downturn” in the countries in which it operates.

“Accordingly, Fastjet expects to report a trading loss and to remain cash flow negative in 2016,” the airline disclosed.

“Based on current forecasts, the company has sufficient funds to meets its operational requirements for the foreseeable future.

“Accordingly, the board is considering a range of funding strategies in the short term, including asset sales, and expects to raise further funds in the near future to provide additional headroom and to ensure the company has the resources to fund future growth as markets improve.”

This came as the carrier reported a reduced operating loss of $37.9 million for the year to December, down from $43.9 million in 2014.

Revenue rose from $53.8 million to 65.1 million as passenger carryings increased by 32% to 787,771.

Child said: “2015 was a year of change and challenge for Fastjet. We made progress in developing our Tanzanian operations, launching Fastjet Zimbabwe and expanding into Kenya but revenues were impacted by a weakening Tanzanian economy and Tanzanian shilling exchange rate and political uncertainty in the country.

“As a consequence of these macroeconomic pressures, consumer spending fell and this had a negative effect on ticket sales in the second half of the financial year.”

He added: “We’ve taken action to mitigate the effects of this prolonged downturn and have reduced operating costs and overheads by rationalising certain routes, reducing frequencies on particular routes and eliminating other underperforming services and this is progressing well.

“2016 will be focused on developing existing routes and operations consistent with the group’s long term vision of becoming the first true pan-African low-cost airline.

“The airline continues to reduce operating costs and overheads and to match capacity to the lower demand now forecast in pursuit of a path to profitability in the medium term.

“Despite the challenges faced in 2015, we are starting to see the benefits of our short term actions and remain confident in our long term strategy where the need for low cost pan-African air travel is evident.

“The board believes that Fastjet is in a position to move forward from the experiences of 2015 and will benefit from the first mover advantage as the network develops.”