This paper examines the use of variable-rate signalling in conjunction with error-correction coding for a meteor burst channel model which assumes that the received signal amplitude decays exponentially. It is assumed that the transmission bandwidth is reduced as a function of the time to compensate for the signal decay. The performance achievable with variable-rate signalling is quantified by calculating the, cutoff rate, Ro. The average signal-to-noise ratio per bit, &/NO, required to support communications is calculated under the assumption that the code rate is equal to the cutoff rate. It is shown that the improvement of variable-rate signalling over fixed-rate signalling is large if the code rate is moderate to high, and that the improvement is small if the code rate is low and the decoder is provided with side information on the received signal level.