Australia Post s survival hinges on its parcel business after the national postal service notched up its first loss in more than 30 years.
Huge declines in the number of companies and people posting letters have been blamed for dragging the business into the red.
Australia Post managing director Ahmed Fahour said losses from its letters service were so big they  overwhelmed  profits from its parcels and retail businesses in 2014-15.
He said losses in the mail business grew to $381 million as more Australians switched to digital alternatives. 
Since 2008, letter volumes have fallen 36 per cent.
 The company has had to absorb over that same time $1.3 billion in losses in the letters service,  Mr Fahour said. 
Australia Post made a $222 million loss after tax for 2014-15, compared with a $116.2 million profit a year ago. Letter volumes fell 7.3 per cent, compared with a 4 per cent fall the prior year.
 As a result of significant investment and focus over the past five years in eCommerce, our revenue from parcels has grown 136 per cent,  Mr Fahour said.  The pure letters business is today closer to 28 per cent of revenue. 
For the first time in their 206- year history, parcels have made up more than half of the group s total revenue of $6.37 billion, rising 3.6 per cent to $3.21 billion.
Mr Fahour said this was achieved despite intense competition from international operators. 
AAP