Letter posting by Australians is in "terminal and structural decline", Australia Post chief executive Ahmed Fahour said after the postal group delivered its first annual loss in more than 30 years.

"We are a parcels company more than a letters company," Mr Fahour said, as a 10.3 per cent drop in the posting of ordinary stamped letters in 2014-15 pushed Australia Post into a $222 million after-tax loss compared with a $116 million profit a year earlier.

Australia Post is trying to move with the times by pushing up snail mail prices and shifting customers online. Credit:Christopher Pearce

Mr Fahour said it was "alarming" to see the rate of decline in ordinary letters rise to 10.3 per cent from 5.7 per cent a year earlier, and that losses in its mail business were so big they had overwhelmed profits from the postal group's parcels and retail businesses.

"This year the losses in mail were so large that even the very powerful and strong commercial businesses of Australia Post could not offset those losses," he said.