What safety protocol should be followed when VNAV encounters a system failure?

When VNAV encounters a system failure, transitioning to manual flight control and closely monitoring altitude is essential for ensuring safety. This action allows the pilot to regain direct control over the aircraft, which is crucial during a time when automated systems are not functioning correctly. Manual flight control provides flexibility in responding to the situation, allowing the pilot to make real-time adjustments to altitude and other flight parameters as needed.

Maintaining close observation of altitude is vital because uncontrolled descent or ascent can lead to dangerous situations, such as conflicts with terrain or other aircraft. This proactive approach helps the pilot manage the aircraft effectively until either stability is regained or they can execute a safe landing.

The other choices do not prioritize the immediate and direct management of the aircraft's flight path during a system failure. Continuing to fly without changes could lead to a loss of control, contacting air traffic control is important but secondary to ensuring the pilot has direct control of the aircraft, and engaging emergency protocols without pilot intervention bypasses the pilot's responsibility to manage the aircraft actively.