Mr. Lance Y. Gokongwei: "On the Wings of Success”
An article published in
BusinessWorld, February 07, 2006
Mr.
Lance Y. Gokongwei is the President and a Director of the JG Summit Holdings
Inc.,Cebu Pacific Air, Inc., Universal Robina Corporation, Robinsons Land
Corporation, JG Summit Petrochemical Corporation, Litton Mills, Inc. and is
the Chairman of Robinsons Savings Bank in the Philippines . His other
directorships include UIC, Digital Telecommunications Phils Inc. and
Singapore Land Limited.
Mr. Gokongwei graduated Summa Cum Laude with double degrees in Bachelor of
Science (Applied Science) from Pennsylvania Engineering School and a
Bachelor of Science (Finance) from Wharton School , USA . He also attended
the Management and Technology Program at the University of Pennsylvania .
The Entrepreneur Of The Year Philippines, a program of SGV Foundation Inc.,
is concluding its third year search for the most successful and inspiring
Filipino entrepreneurs. Supporting the program as strategic partners are the
Asian Institute of Management, Bankers Association of the Philippines ,
Department of Trade and Industry, and the Philippine Business for Social
Progress. Over the next few weeks, BusinessWorld will feature each of the
finalists for Entrepreneur Of The Year Philippines 2005.
Lance Gokongwei grew up in a family of entrepreneurs where business was
regular fare at the dinner table. Mr. Gokongwei cites his father – Mr. John
Gokongwei, Jr. – as his strongest influence and mentor who encouraged him
and his sisters to start their own businesses and make their own mistakes.
“I certainly admire him for his visions, entrepreneurial success, hard work,
and discipline,” he adds.
Cebu Pacific Air – popularly known as Cebu Pacific – was established in
1996, shortly after the government liberalized the aviation industry. The
business model was loosely based on an American low fare airline. Mr.
Gokongwei assumed the leadership of Cebu Pacific from the very start. With
three secondhand DC-9 aircraft, Cebu Pacific began operations with 24
flights daily to and from three destinations.
Cebu Pacific entered the market as a low-cost alternative to the country's
only carrier by offering great value service at fares lower by as much as
40%. At the same time, the airline offered on-time service reliability of
90%. As a result of these innovations, Cebu Pacific greeted its one
millionth passenger just 18 months later.
The airline has boarded 12 to 13 million passengers since it started
operations – two million passengers in 2005 alone. From the original three
DC-9s, Cebu Pacific's fleet currently consists of seven DC-9s four Airbus
319s, two Airbus 320s, and two Boeing 757s. The low-cost carrier now flies
to Hong Kong and Korea as well.
“To make a positive difference,” is Mr. Gokongwei's personal motto. Under
his nine-year leadership, Cebu Pacific achieved phenomenal success in the
local aviation scene. Fares then were 30%-40% higher and the market grew
only 4%-5% a year. During the first three o five years of Cebu Pacific's
operations, however, the number of people traveling increased by 20 to 25%.
Fares have also decreased, pricing has been standardized, and ticket
distribution networks have widened significantly.
Cebu Pacific is the first low-fare airline in the country, and the first
Philippines carrier to develop an e-ticket facility for use in domestic
flights. The airline is now the second largest airline in the country in
terms of capacity offered, traffic carried, and revenues generated. By the
end of 2004, Cebu pacific attained a 36% market share on the routes where it
operates. Councils of major cities in the country have even requested that
Cebu Pacific include them among their destinations.
Cebu
Pacific's affordable rates make it a favorite among frequent and
not-so-frequent flyers. It also has a substantial business due to its
on-time performance. For a memorable flying experience, Cebu Pacific
redefined in-flight entertainment with the introduction of “Fun Flights,”
where games are played on board flights. The passengers' positive perception
of this unique approach to flying has had a noticeable impact on the Cebu
Pacific brand.
From the start, Mr. Gokongwei has made sure that his employees have a
personal stake in the company. Besides profit sharing, he encourages staff
to share their ideas directly with management. His people have rewarded him
with impressive work habits that many Cebu Pacific passengers have noticed.
Awards such as Best Pilot, Best Flight Attendant, Best Back Office, and
safety awards are given to deserving employees every March 8, the airline's
anniversary.
The corporate culture that Mr. Gokongwei has successfully built within the
Cebu Pacific team withstood its most challenging test in 1998, when Flight
387 slammed into a mountain killing all 104 people on board. Mr. Gokongwei
was visible to the public from the time the crash was announced and his
staff rallied solidly behind him. More than 200 volunteered to help in the
search and rescue operations, comforted families, and took unpaid leaves in
the two months that the airline was suspended.
More recently, Cebu Pacific has tied up with GE and Singapore Airlines to
decrease maintenance costs and increase retention. The partnership allow the
carrier to outsource its maintenance and send pilots for training abroad
without losing them to other airlines.
“I want to build an organization that will last and continue to deliver
value to our costumers and tourists,” says Mr. Gokongwei. He foresees Cebu
Pacific to be the largest domestic carrier in the next three to five years.
Once its refleeting with 17 new Airbus aircraft is completed in 2009, Cebu
Pacific will have the youngest fleet in Asia . The airline also plans to fly
to new Asian destinations, offer fares as low as those of maritime transport
vessels, and introduce ticketing and reservation through SMS technology.
Mr. Gokongwei is also a director of the Gokongwei Brothers Foundation, an
organization that provides for the development of future leaders through
education. It uses dividends from its 17% stake in JG Summit Holdings to
educate Filipinos in engineering and the sciences, and donate to deserving
foundations. Cebu Pacific has built an orphanage not far from its terminal.
Mr. Gokongwei is a member of the Young Presidents Organization and an
affiliate of the World Economic Forum's Global Leaders for Tomorrow Program.
He was also a The Outstanding Young Men (TOYM) awardee in 2000. Steering
Cebu Pacific for nearly a decade prepared Mr. Gokongwei for the leadership
of JG Summit Holdings which he assumed in 2001.
As Cebu Pacific continues to introduce more breakthroughs in the airline
industry, Mr. Gokongwei shares this simple advice to aspiring entrepreneurs
: “Love what you do.”
In practicing his own advice in managing and growing Cebu Pacific, Mr.
Gokongwei will continue to fly high.
The winners of the Entrepreneurs Of The Year Philippines 2005 will be
announced on March 8, 2006 in an awards banquet at the Makati Shangri-La
Hotel. The Entrepreneur Of The Year Philippines will represent the country
in the 2006 World Entrepreneur Of The Year in Monte Carlo, Monaco on June
11, 2006. Entrepreneur Of The Year is produced globally by Ernst & Young.