Agents Carefully Travel Precarious Road : Service: Travel agents must put customers’ needs first, despite lure of bigger commissions for steering clients to certain airlines.

Airlines are skimping on meals, laying off workers and buying fewer jets, but as they scour their businesses looking for the smallest savings, one expense--their third largest--has been growing.

Travel agencies have been able to negotiate sweeter and sweeter deals with airlines willing to pay bigger commissions to agents who can deliver passengers.

While travel agents ostensibly work for the passenger, most have agreed to make one airline or another a “preferred provider.” That airline, typically the biggest carrier in town, pays the travel agent a bonus if the agent steers more than a certain number of passengers its way.

The arrangements have put travel agents in an awkward position. They want to please clients to get repeat business, but they’re tempted by bonuses that in many cases mean the difference between profit and loss.

“If all things are equal, price and schedule, of course you’re going to go with the preferred provider,” said Earlene Causey, president of the American Society of Travel Agents and owner of VIP Travel Agency of Baytown, Tex.

While conceding she’s sure that some travel agents do send customers to the bonus-paying airline even if it means a higher fare or longer flight, “I can’t imagine in my wildest imagination somebody being dumb enough.”

After years of guiding clients through seemingly endless tumult in the airline industry, the relationship between travel agents and many of their clients is uniquely close. Their own integrity, agents say, is one of their most valuable assets.

The arrangement is much like the real estate agent who works for the seller, but drives potential buyers around town showing them houses and treating them like clients.

Unlike a real estate broker, the travel agent relies on repeat business. With little or no advertising budget, travel agents depend on their reputation and that, travel agents say, keeps them honest.

Travel agents compare the arrangements to special deals big-volume retailers get from suppliers.

But travelers frequently rely on travel agents for the kind of advice they don’t seek from the local grocer. Travelers want to know whether the new airline with a goofy name, but low fares, has a reputation for service and staying on schedule. Or whether the labor troubles at a big airline mean there’s going to be a strike.

The bonuses sometimes put the travel agent in the position of doing what’s best for the customer or what’s best, at least in the short-term, for the travel agent.

On domestic flights the bonuses usually mean an extra 5% above the 10% base commission. But on international flights the bonuses are higher. Airlines split ticket revenue with certain agents on flights between the United States and Asia, for example.

United Airlines pays up to 40% commission to agents on some Asian destinations. To attract interest in its Portland-Seoul route, Delta Air Lines pays a 50% commission, about $1,000 for a round-trip ticket.

Travel agents who have signed up to handle the travel for big business frequently pass those bonuses along to the corporate client. That’s one way a big agency like Carlson Travel Network can offer General Electric Corp. fares 10% to 20% lower than it would otherwise pay.

American Express, which operates one of the biggest travel agency chains, usually passes along bonuses to big corporate clients as an incentive to keep the business.

But passengers with less clout rarely see the extra commissions.

“That’s been a real sore point with customers that deal with travel agents,” said one executive at a large international airline who spoke on condition of anonymity for fear of offending agents. “But it’s a way to get more business. . . . All the carriers support the travel agent system. You have to or you’re dead.”

America West recently angered agents by urging customers to make reservations by calling the airline’s toll-free telephone line. After travel agents complained they were losing business, the airline added the standard tag line to its advertisements: “Call your travel agent.”

More bluntly: “You have to bend over and kiss some booty,” David Neeleman, president of Morris Air, which was recently bought by Southwest Airlines, said of the airline-travel agent relationship.

An estimated 85% of all airline tickets are booked through travel agents. From the family-owned agency in the local mall to American Express, travel agents constitute an enormous sales and marketing staff for airlines.

Despite the increasing amount airlines pay for commissions and private griping by many airline executives, an official at one of the country’s biggest airlines whose job is to court agents says it’s a bargain.

It would be even more expensive for the airline to distribute tickets itself through field offices and electronic transactions, the executive said, speaking on condition of anonymity.

Adjusted for passenger growth and inflation, travel agent commissions have grown 9.5% since the airlines first started showing signs of serious financial trouble in 1989. By comparison, the inflation-adjusted average wage, including benefits, for employees who still have airline jobs is 3.4% higher.

The Justice Department wants to know whether big airlines are using the extra commissions to entrench themselves at their hub airports and stave off new competition.

The government is only looking at Delta in Salt Lake City, but airline industry executives say the bonuses have become a standard way of increasing commissions that otherwise would languish with low ticket prices. At the same time, the bonuses reward favorite agencies for sending them passengers.

The bonuses, called override commissions in the business, are paid when a travel agent in Salt Lake books more than Delta’s normal market share. Once that threshold is crossed, any Delta tickets the travel agent books mean a bonus.

Some suggest that if travel agents charge customers directly for their services, rather than depend on the incentives of airlines, appearances of any conflict could be erased.

But, the agents point out, airlines would have to charge customers a similar fee. Otherwise many passengers would probably skip travel agents altogether and force airlines to increase the money they spend distributing tickets.