In a word: COMPETITION.
The EU today has a much more competitive and better functioning market than the US.
People can choose from multiple airlines, often at multiple airports serving the same city and are spoiled for choice with a wide range of competiting and substitute transportation modes ranging from high speed trains to hydrofoil ferries. All of this requires airlines to really be competitive -- even as many are wildly profitable.
Failing airlines, even big names like Swiss were allowed to fail and disappear from the market. Successful airlines were still allowed to be bought up by foreign companies in order to keep management teams sharp and to gain economies of scale. Multiple, new, nimble, innovative, sustainably business modeled, low cost competitors sprang into existence.
Compare this to the US where most legacy airlines are the zombie ghosts of failed, bankrupt companies that were propped up with Ch. 11 enabled government subsidies and taxpayer, creditor and employee-exploiting bailouts like Delta.
Europe’s low-fare carriers may be best known in America for outrageous proposals to charge for bathroom access or offer stand-up seating, both ideas floated by Ryanair that were never adopted.
But travelers who have flown within Europe lately often took away a different impression — that airline tickets were surprisingly inexpensive, especially compared with prices to fly within the United States...
“Even after taxes, you see a better fare per mile in the European Union than you do in the United States,” said Mark Milke, a director at the Fraser Institute, a public policy research group in Calgary, Alberta, who published a paper last year comparing the lowest fares available on a sample set of routes.
http://www.nytimes.com/2011/07/12/bu...gewanted=print
Competition doesn't seem to work very well for very long in the US today, whether looking at the airline industry, the banks, health insurance, etc. Maturing industries are allowed to consolidate into unregulated, highly inefficient oligopoly structures and often de facto cartels and local market monopolists: in some states one insurance company has 87% of the market and in many cities there is only one airport, one airline, and no trains or intercity buses. With predictable results on the exploitation of trapped consumers with no freedom of choice, poor service and high prices resemblant of the previous USSR -- but without the government protections that Soviet citizens had.
What do you think needs to happen for the US to be able to enjoy the freedom of choice and lower prices from a better functioning market that Europeans enjoy today?