Why is there this discrepency?

Do not have any insight into the European side, however, in my search on Google Flights, right now the whole month of June and July round trip is around 1,490 for that time period if you fly into Dusseldorf, for example.
From Dusseldorf there are low cost airlines that go to Zurich for around 120 USD.

Even better flying into Madrid from LAX is coming up for 1,100 round trip.
From Madrid to Zurich is less than 200 USD round trip.
This is for the months of June-July.
using the much cheaper connecting flights for Europe airlines can make a trip much more affordable.

I should add that we already have our tickets flying into Dusseldorf and out of Frankfurt. We used FF miles but IF these nonstop Zurich flights would have been available to us at this price in the US market, we would have seriously considered just paying cash for them and not using our FF miles. To pay $ rather than miles for the route we booked last week we were looking at paying $1550 pp.

My family in Germany tell me it's less expensive to fly round trip from Europe than it is to fly round trip to Europe.

I am pretty certain there has been prior discussion of this here. Airfares for round-trips from Europe are less than the identical trips originating here, even though they consist of the same legs (albeit on different dates and in different sequence). They are purchased on the European web-site of the airline, not the US, and while this will always be in their local currency, not USD, it will on conversion net substantially less than the US flights. I do not recall seeing a satisfactory answer for the difference, but there must be one.

So many more options for regional airlines than here in the US. And I have seen flights as cheap as 49 USD from some European cities.
In addition, if the carrier is EU like British Airways, the change fee is regulated. No more than 50 USD to change a flight vs the 150-300 gouging the US airlines charge.

I just looked at Swiss Int'l site and flying 7/6/2016 and return 7/20/2016, it costs 1201 CHF to fly Zurich to LAX rt, while going the other way is 1754 USD. Since the USD is virtually equal to the CHF today, that is the price difference.
Airlines price to the market, and in the current market, Americans will pay this, and the other way is what Swiss will pay. Airlines like to make money and set prices for what they can get away with. That might not be a satisfactory answer to some, but that is the way it works. BTW, Canadians are paying a lot less these days as well.

There was an article about this in Wall Street Journal last January about this. No explanation as to why. There seems to be no link between what it actually costs the airline and what they can get people to pay.

The lesson I've learned is that when we have a family with 2-3 kids coming to exchange with us I'm not going to be as concerned about their ability to afford the airfare for the trip!

It's all about supply and demand. Weaker Euro compared to the Dollar means demand increases on this side of the Atlantic, demand goes up and so do prices.

DJ

Norwegian Air Shuttle flies to/from Los Angeles to London Gatwick for just under $800 round trip. Then EasyJet can get you to most places in Europe for $100 each way if you buy tickets ahead of time.

Do you see this discrepancy for flights operated by both US flag airlines (eg United) and European flag airlines (such as Swiss)? If only European airlines, I think they are subsidized by the taxpayers in those countries, so perhaps they offer "discount" to their subsidizers. If that is the case, you would not see the same discrepancy for tickets on US airlines.

As for supply and demand, airline tickets are highly susceptible to market based pricing, and prices vary literally by the minute, so you have to compare ticket prices at the same time. However, depending on the nationality mix, I would think it would be more profitable to price all tickets a little lower than the US price and fill the plane with the higher price US passengers than to fill it with European passenger at a lower rate.

BlockquoteDo you see this discrepancy for flights operated by both US flag airlines (eg United) and European flag airlines (such as Swiss)? If only European airlines, I think they are subsidized by the taxpayers in those countries, so perhaps they offer "discount" to their subsidizers. If that is the case, you would not see the same discrepancy for tickets on US airlines.

Lee if you go to the UNITED website and search LAX-ZUR the fares for United, operated by United, Air Canada and Swiss Air all say about $900 per each leg of the flight (using our August dates). If you reverse the cities, each leg is just over or under $600 on the United site. This is a 50% difference! It must be more of a supply and demand. It can't be an exchange rate unbalance for this 50% descrepency. It has been discussed before but this is still so hard to understand.

Edit: sorry for the odd block quote. I sometimes have trouble getting this to properly format when using my iPad...

Mona, I've been wondering about this for years. Supply and demand makes no sense; as someone said, the flights are just as full going to the U.S. from Europe as they are going the other way. I don't think the euro-dollar exchange rate has much if anything to do with it either. A few years ago when the exchange rate was pretty bad for Americans, flights from Europe to the U.S. were still significantly cheaper.

Check out these fare differences:

Delta Airlines/KLM
March 15 - Oslo to Amsterdam to Seattle
March 22 - Seattle to Amsterdam to Oslo
Economy $633 Business $2365

Delta Airlines/KLM
March 15 - Seattle to Amsterdam to Oslo
March 22 - Oslo to Amsterdam to Seattle
Economy $1037 Business $6318

Supply and demand makes no sense; as someone said, the flights are just as full going to the U.S. from Europe as they are going the other way.

Yes, but the airlines, based on their bookings, have determined that Americans have more change in their pockets going dingalingaling and are prepared to hit the "purchase" button more readily.