Manila: Lance Gokongwei, 57, the billionaire behind budget airline Cebu Pacific, just confirmed a mega-deal worth about $24 billion at list prices for 152 Airbus A321 neos.
It's one of the highlights of Farnborough 2024, which runs until Friday (July 26), and the biggest aircraft order yet placed by a Philippine-based carrier.
Milestone
It’s a fresh milestone for Gokongwei, who started earning 2,000 pesos per month (about $58) selling things like corn chips and snacks in his father’s business.
In the 1980s, he learnt the ropes tackling low-level positions. “Basically, that meant I had to go out and sell Jack ’n Jill snacks to supermarkets, groceries, and sari-sari (local sundry) stores,” he said.
And despite having a tycoon for a father, Lance didn’t have it easy.
“Just as life did not give my father everything, he made sure that we, his children, would not get anything on a silver platter,” Gokongwei recalled during a speech he gave to university graduates here.
According to Lance, his father, John Gokongwei Jr, believed in the principle, “You have to earn your keep.” For a time, as a roving salesman, Lance drove a car – a rundown Datsun with a broken air-conditioner.
While earning his Bachelor's degree in Applied Science, and concurrently taking his Finance degree from Wharton School of the University of Pennsylvania, Lance would return to the Philippines during summer. And instead of taking a break, he worked at the warehouse of their department store.
After completing his double degree, Lance gradually climbed the corporate ladder.
No walk in the park
It was not a walk in the park, and on every occasion, Lance extols the value of hard work. “Hard work beats talent when talent doesn’t work hard,” he was once quoted as saying. His father’s key work ethic for Lance and his siblings: “If you don’t work, you don’t eat.”
Today, Lance and his siblings (Robina, Lisa, Faith, Hope and Marcia) have a net worth estimated by Forbes at $3 billion, largely from their stake in JG Summit.
His cup is full: Lance is at the helm of JG Summit, the family’s holding company, of which he has been president and CEO since May 14, 2018.
He also chairs Robinsons Supermarket Corp, Universal Robina Corp (URC), Robinsons Land Corp, Altus Property Ventures, Inc., JG Summit Olefins Corp, and Robinsons Bank Corp.
Lance is ready for more, having already into petrochemicals and renewables. In November, Merbau Corp, JG Summit’s green energy arm, completed its 13.81-megawatt (MW) solar project in Batangas province to curb the company's carbon emissions and reduce power bills in its integrated petrochemical complex.
Feedback, work ethic
Lance constantly seeks feedback.
“Feedback is a gift. The purpose of feedback, whether positive or negative, is to help in your development,” he said.
In the last 20 years, the holding company has proven its resilience, growing from 1.668 pesos per share in July 2004 to 28.25 pesos as of July 22, 2024 – a nearly 17-fold rise.
His father, John Robinson Lim Gokongwei Jr., was a highly respected business icon, who knew what destitution meant. John started working at age 15 after his father (Lance’s grandfather) died during World War II.
While evading Japanese soldiers along the way, John’s boat which he used for trading sank. He and his companions used the rubber tires they were supposed to sell to swim to shore.
The end of the war and the subsequent rebuilding gave Gokongwei a fresh opportunity, focusing on post-war trade, selling US-made goods (with American-Asia Trading).
In 1957, he started a cornstarch plant with a 500,000-peso loan, which has since grown into Universal Robina Corp. (URC), one of the country's largest food and beverage companies.
Today, URC has a presence across more than 50 countries, with business units serving nations and territories in North America, Europe, the Middle East, Africa and Indian Ocean islands, North Asia, and Oceania and the Pacific Islands.
With brands such as C2, Jack ’n’ Jill (Chiz King, Piattos, Cloud 9, Poppins, Nova, others), Maxx and X.O. Coffee, Hello Chocolate Bars, Wiggles Lush Candy, Nips, Presto, Dewberry, Vcut, Mang Juan and Munchy’s, URC is known as the first Philippine-based “multinational”.
Cebu Pacific soars
The launch of Cebu Pacific, a low-cost airline launched in 1988, was never easy.
Given the aviation industry’s tough regulations, market entry took time. It finally commenced operations in 1996. Two years later, tragedy struck.
Cebu Pacific’s Flight 387 from Manila to Cagayan de Oro (a 30-year-old McDonnell Douglas DC-9-32), crashed on the slopes of Mount Sumagaya in Claveria.
Post-crash, the airline has stayed the course, offering affordable flight options, expanding its routes, covering numerous destinations within the Philippines and other countries in Asia, the Middle East, and Australia.
Cebu Pacific is now recognised as one of the Southeast Asia’s leading low-cost carriers.
On failure
“My father has always hammered the point that the road to success is littered with failure. It is inevitable, especially when you dream big. Remember, however, that ultimately you will be remembered for what you have accomplished, not for what you have failed to achieve.
“For it is not how many times you stumbled or failed but rather how many times you have stood up and attempted to try.”
$24 billion Airbus deal
Cebu Pacific announced on July 2, 2024 a deal with Airbus to acquire 152 A32Neo planes. “Why are we buying the planes? It’s simple: We want to support growth in the Philippines,” Lance explained.
The carrier is famed for its “P1so Fare” seat sales, offering 1-peso promotional base fares on its flights. The deal is the biggest yet in Philippine aviation history.
“In the end, we chose the aircraft that will keep Cebu Pacific competitive for many more years to come. And it provides the best economic outcome for our passengers,” he said.
