The United States airline industry has been in a funk. No, it isn't a September 11th funk; many carriers have been encountering turbulence for almost three years now. And September 11th is but an unpleasant memory to the traveling public in the rest of the world, as air travel begins to expand again across Europe and planes fly across the Pacific fully loaded, as they did in 1999. Even Canada has seen a recovery.

But old-line US carriers continue to struggle, and United Airlines threatens to become the largest casualty of Chapter 11 that the industry has ever seen. Experts blame any number of factors. Heated competition from low-fare carriers, who have remained profitable despite the downturn, has been cited as one culprit. Others say that business travelers, buffeted by the falling profits of their own companies, have grown weary of routinely paying five times as much as the family that is flying to Disney World, and are finding ways to avoid flying by teleconferencing and relying on the Internet. Still others say the hassle factor of airport security has grown so onerous and time-consuming that many travelers would rather drive their own cars from Boston to New York rather than catch a Shuttle that might get them to their destination in about the same time (if they're lucky). Finally, some say that the costs of labor has become too burdensome; that old-line hub-and-spoke carriers will never become truly competitive until they pare away some of their employee expenses and gain work-rule efficiencies from their unions.

Against this conventional wisdom, one has to observe the recent successes of the European carriers, and in particular the national flag carriers of Europe. Industry observers previously compared them to elephants headed for a graveyard, and the weight of both the September 11-induced traffic slump worldwide and the proliferation of low-fare carriers in Europe would seal their doom. But the Europeans have staged a comeback, and some of the biggest behemoths are beginning to show growth and profits again. So why are the Europeans thriving while the Americans are having such a hard time pulling the industry out of its tailspin? Perhaps industry analysts are spending too much time pronouncing a paradigm shift when they should be engaging in counterintuitive thinking. On that basis, here are the Seven Keys to the Europeans' success:

Focus operations in economically declining locales - The esteemed Robert Samuelson of MIT recently pronounced the European economy stagnant and criticized Germany as the "sick man of Europe". Over the past decade, European economic growth has lagged substantially behind the United States and is expected to do so this year, which is a considerable feat given the confidence the Securities and Exchange Commission has offered American investors in recent weeks. Other fundamental factors promise even less growth in the future. The population of many European countries is expected to age and decline simultaneously; the only increases are the result of an influx of immigrants who have dramatic cultural differences with the indigenous population. Throw this on top of the traditional shortcomings for which most people who worship at the Chicago School fault the Europeans - generous welfare benefits, high taxes, uncompetitive state-owned industries, dominant unions and demanding social and environmental restrictions - and you have a climate that is very conducive for the growth and profitability of airlines like Lufthansa and Air France. Lufthansa takes it a step further by expanding eastward into the Russian hinterlands, while Air France sees magnificent opportunities in places like Sierra Leone.

Use congested airports as an operational hub - One need look no further than Frankfurt, the home base of Lufthansa, for a demonstration of the success of this strategy. Frankfurt Rhein-Main has three runways that struggle to support 400,000 air carrier operations a year, yet annual operations have routinely exceeded that number, approaching 500,000 last year. Terminal space has been at such a premium that aircraft are routinely parked on a ramp area between two taxiways. If that were not enough, half the airport belongs to the United States armed forces. We are presumably scheduled to leave Rhein-Main in a few years, which would allow the domestic side of the airport to expand, but why tamper with success?

Experience labor instability - One of the charms of flying Air France is the opportunity to encounter an exciting variety of labor unrest. The pilots of the airline engaged in off and on labor stoppages over the summer, and the ground personnel are known to be so militant that they will wreck baggage carts and burn tires on the tarmac if they are not happy. And those are merely the labor forces the airline can control. Throw into the mix an occasional wildcat job action by French air traffic controllers and you have a recipe for customer satisfaction, repeat business and profits.

Rely on an unwieldy air traffic control system - Strikes are but one element of the surprisingly robust European air traffic control system, which is actually not one unified system but a series of individual fiefdoms, each run by the respective government over which the airspace sits. Therefore, a flight from Warsaw to Madrid might require a handoff from the Poles to the Germans to the Swiss to the French and then to the Spaniards. Presumably they all communicate in English, but you can never tell with the French. Eurocontrol is supposed to administer this entire mess, but the air traffic controllers in each individual principality have been reluctant to hand over authority to a central agency, presumably because they fear the agency could be sold to the private sector. A further complication is all the military airspace that NATO occupies. No wonder everyone gets stuck in a holding pattern over the Alps.

Own a ridiculously diverse fleet - So Southwest has successfully built its fleet around the 737? Who cares! Air France has never met an airplane they didn't buy. In their fleet are 747's, 777's, Airbus A340s and 330s. They have 767's, A321's, 320's and 319's, and even 737's. They also own some Fokker F-100's, a few 50-seat regional jets, and of course the Concorde. Somewhere they may even have a few of the old Caravelles sitting around. While most people in the industry will tell you that a simplified fleet structure reduces maintenance costs and spare parts inventories, the French say the more the merrier. Perhaps they need an Antonov 124?

Compete against nationally subsidized airlines - The governing rules of the European Union suggest that national flag carriers will be allowed to go the way of the dodo, cut from the umbilical cord of governmental subsidies. Reality suggests, though, that half-dead carriers such as Olympic Airways, Aer Lingus and TAP Air Portugal are doomed to be around forever as countries find creative ways to prop up their failures. Even the Dead have become living, with the formation of zombie carriers such as Swiss Air Lines to replace Swissair and SN Brussels Airlines emerging from the ashes of Sabena.

Compete against yourself - The model for this has to be Air Canada, which, despite being a near-monopoly carrier in a land of 31 million people, has decided that it needs to differentiate the product even further. They have formed a low-fare subsidiary, Tango, to entice all those passengers who now find WestJet so alluring, and they've formed a regional version of themselves which they call Jazz. KLM has formed Buzz and Lufthansa is forming a subsidiary called GermanWings. Perhaps they are aware of the screaming success that was Continental Lite.

Perhaps this kind of counterintuitive thinking is what US airlines needs in order to succeed. Air France had profits in excess of $200 million halfway through the fiscal year ending September 30, 2002 - down, but not as bad as the losses they had last decade. KLM had profits of just under $90 million over the summer months when almost all major US carriers were losing money. Lufthansa expects profits of nearly $400 million this year. Each carrier is talking about growth and expansion plans while US carriers forecast a continuing retrenchment in the face of weak traffic. You have to admit that something about the European business model works for them.