Australia Post chairman John Stanhope said a user-pays postal system was a viable option after the company's letter operations ­suffered a $218 million loss last year because the public had sent fewer letters than ever.

The user-pays model means residents would pay an annual bill in addition to the stamp price, which increased from 60¢ to 70¢ in March.

'If you want it fast, you pay for it.'

"If you want it fast, you pay for it," Mr Stanhope said.

"You want it more related to the cost base, so if you are happy enough for your letter to be delivered less frequently then you pay less, if you want it more frequent you pay more, if you want it express you pay more, so you pay for the level of service," he told Fairfax Media following a Trans-Tasman lunch in Melbourne on Tuesday.