London --- With the dollar down and fuel prices up, U.S. airlines are fighting to stay afloat. But they're also fending off another challenge: increasingly powerful European rivals.

Analysts say European airlines are in a much better position to weather the current storm as they enjoy the benefits of a strong euro, newer fleets and a recent wave of consolidation.

And it shows. While many U.S. airlines are putting expansion plans on hold, British Airways has just launched a new premium subsidiary, OpenSkies, with direct flights between Paris and New York.

Perhaps most significant to consumers, analysts say, is that European airlines might be in position to offer better deals to passengers.

"I think it's a good and interesting possibility, especially as the European carriers test the waters in U.S. markets," said Betty Stark, a travel consultant in Madison, Wis. "Cheap flights here in the U.S. will surely go the way of the dodo bird if the airlines are to avoid total shutdown."

The Europeans hold several advantages right now.

"The major European carriers have stronger balance sheets than their U.S. counterparts," said Ernest Arvai, president of the Arvai Group, an airline consulting firm based in Windham, N.H. "They also run more modern aircraft that typically use less fuel."