Vietnamese pilots allowed pay raise to match foreigners

A governmental decree on Wednesday said the maximum amount of yearly extra pay for Vietnamese pilots would depend on the discrepancies between their salary and foreign pilots’, as well as their titles and seniority.

The government said Vietnam Airlines must take into account its financial capabilities when determining the amount of extra pay, while still meeting profit targets set by the Commission for the Management of State Capital at Enterprises. If the carrier suffers deficits, the amount of deficits must be less than that of the previous year.

The proposal to increase yearly pay for Vietnam Airlines’ domestic pilots was proposed by the Ministry of Labor, Invalids and Social Affairs in May as pilots had begun abandoning the company due to low pay.

There were over 6,000 employees working for the airline in 2022, and the company had a wage fund available of VND1.7 trillion ($70.83 million), according to a report by the carrier. Among the employees, there were 829 Vietnamese pilots and 152 foreign pilots. The average monthly pay of Vietnamese pilots was VND85 million, around only 59% of their foreign counterparts'.

By 2025, the number of Vietnamese pilots with the airline is expected to increase from 865 to 1,044, with their monthly salary increasing from VND115.6 million to 134.8 million. Foreign pilots’ pay is expected to increase from VND268.4 million to 279.2 million, in accordance with market demand.

The labor ministry said the pay for Vietnamese pilots has been so significantly lower than foreign pilots that the company’s wage fund is not enough to compensate for the salary discrepancy. Tough competition has prompted many pilots to quit Vietnam Airlines, with 35 Vietnamese pilots having quit since 2020, and others planning to do so after their contracts expire.

The worker shortage would lead to a disruption in flight activities, and the carrier may have to hire more foreign pilots. The cost of hiring a foreign pilot is estimated to cost some VND2.5 billion a year, including expenses like salary, rent and insurance. If every year, Vietnam Airlines loses 120-140 Vietnamese pilots, the expenses needed to replace them with foreign pilots would be around VND300-600 billion.

Vietnam Airlines would need to spend VND300 billion every year to pay Vietnamese pilots at 70% of foreigners' wages, or VND800 billion at 90%.