An Post’s most unprofitable business is its postal delivery service, the State company’s incoming chairman told an Oireachtas committee today.

The company last week revealed that it lost over €39 million last year, €17 million of which was directly attributable to its operations.

Chairman designate, Christophe Mueller, told the Oireachtas Joint Committee on Transport and Communications today that the most unprofitable element of the business is the "last mile", that is, the final leg of its postal delivery service.

He warned that the company has to tackle the problem of maintaining services such as this while keeping them affordable for its customers.

Mr Mueller indicated that post codes could be part of the solution. Responding to questions from committee members, he told them that he favoured the introduction of post codes to the Republic, which has been under discussion between the company and the government for several years.

He pointed out that the absence of codes could create difficulties for items being posted from outside the State, particularly where addresses are not precise, and delayed them from reaching the last mile in the first place.

Their introduction would make the service more efficient and less costly. He also agreed that they would render the postman’s local knowledge “redundant”.