Duong Tri Thanh, general director of Vietnam Airlines, says the airline is facing a brain drain as new entrants enter the commercial aviation market.

In the current context of a pilot shortage, an airline’s remuneration policy is a key factor for firms to attract qualified personnel, he said.

Thanh proposed that the government loosen up the airline’s wage-setting mechanisms, allowing Vietnam Airlines’ management more autonomy in deciding staff remuneration so that it can carry out policies to attract and retain high quality personnel.

Vietnam Airlines has also proposed that the government make amendments to the labour law to ensure "sustainable development of the country’s resources, especially highly-skilled labour."

This would involve setting regulations on notice periods before contract termination, employee’s financial contribution to training, or employee’s obligation to reimburse training costs before switching employers.

Minister of Transport Nguyen Van The has concurred with Vietnam Airlines' recommendations on changes to the labour code, saying there should be appropriate provisions to protect and retain highly skilled human resources.

In 2018, Vietnam Airlines pilots received an average monthly salary of VND132.5 million ($5,719), an increase of nearly VND11 million ($475), or 9 percent compared to the previous year. However, this was much less than what their peers earned at other low cost carriers operating in Vietnam.

For instance, Vietjet Air’s latest official report in 2017 showed that average monthly salary of their first officers (co-pilot) range between $5,300 to $6,200 monthly, while a captain’s salary was between $7,900 to $10,500, based on productivity and seniority.

Meanwhile, budget air carrier Jetstar Pacific, partly owned by Vietnam Airlines, also offered higher average salaries to its pilots, ranging from VND110-160 million ($4,740-6,890) based on experience (number of hours flown) and seniority.

Bamboo Airways, Vietnam’s newest airline which launched only in January, is reportedly offering even higher salaries, according to its advertisements on recruitment websites.

It has been reported earlier that low pay, unsatisfactory work conditions and severance policies have pushed pilots to quit the national carrier in droves last year. This, in turn, had pushed the airline to raise wages last June to retain its pilots.

Industry insiders say that pilot training is very expensive, with stringent health and technical knowledge requirements. Since the number of qualifying pilots is limited, losing them to competitors badly hurts carriers.

Vietnam Airlines earned record revenues of VND96.8 trillion ($4.17 billion) last year, up 17 percent from 2017. Pre-tax profit was VND3.24 trillion ($140 million), 34 percent above the target.

It aims to achieve consolidated revenues of VND112 trillion ($4.83 billion) this year and plans to add 22 new airplanes (two Airbus A350s and 20 Airbus A321neos) to expand its fleet to 112.

The country’s largest airline by passengers has been facing rising competition from private budget carrier VietJet Air and others like the latest market entrant, Bamboo Airways.