Australia Post has pleaded for government assistance to ensure its future, as it plans to introduce a second-class delivery system to try to manage its worsening financial position.
With mail delivery losses expected to reach $350 million this financial year, up from $218 million last financial year, Chief executive Ahmed Fahour says the figure will continue to increase.
“Up until this year we’ve been able to offset these ballooning losses in letters with profit growth from parcels and retail… services. But we have now reached a point where that’s no longer possible.
“With mail volume declines now accelerating to between 8 and 11% per annum over the coming years, our letters business, under current momentum, will lose over $1 billion annually in the coming years. We do not have the ability to absorb this,” Fahour said.
Fahour stressed that without government assistance the postal service will not be able to continue operations.
Mail volumes are expected to decline by a further 40-50% over the next five years, “without change we will not be able to survive,” he said.
By 2025 the letters business will have “completely evaporated and accumulated billions of dollars of losses.”
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