Australia Post needs to restructure letter delivery

[TrueBlueTerrier]

Australia Post needs to restructure letter delivery or be ‘the next Kodak’, boss Ahmed Fahour warns

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AUSTRALIA Post chief Ahmed Fahour says the government business risks becoming “the next Kodak” unless it is able to restructure its traditional­ mail division.

Mr Fahour has raised the prospect of being forced to put post offices on the chopping block, telling a conference the legal framework Australia Post operates under requires it to sell assets before it can ask for a government bailout.

“Without reform our Act requires us to fund the losses through asset sales and only then request taxpayer-funded government support,” he said.

Mr Fahour did not reveal how deep any future asset sales could go but an Australia Post spokeswoman told the Herald Sun the service operates 429 more outlets than its charter demands, including 61 in rural and remote areas.

Australia Post lost a record $187 million on its letters business last year.

It recorded an overall profit of $311.9 million — underpinned by parcel delivery — and paid a $243.7 million ­cash dividend to government.

Mr Fahour said Australia Post’s present financial path was unsustainable and letter losses would soon swamp parcel delivery profits, threatening “the viability of our extensive post office network across the country”.

His comments came as an independent report found Australia Post would make a $6.6 billion loss in the next decade if its letters division continued to operate unchanged.

Mr Fahour is pushing to introduce a two-tiered delivery system, charging a higher fee for daily delivery and winding back regular services to three days a week.