- United Airlines' CEO said travel demand jumped in July, "like a light switch coming on."
- "Bookings have been even stronger as we come into September," he told CNBC.
- Scott Kirby added he thinks this means the economy is doing better than other data suggests.
Travel demand has soared back in the second half of the year, and that's good news for the economy at large, too, according to United Airlines' CEO.
Scott Kirby told CNBC's "Squawk Box" on Tuesday that demand significantly improved at the beginning of July.
"It was like a light switch coming on," he added.
The summer travel period is key for airlines, while Labor Day and Thanksgiving are also significant revenue drivers.
"Bookings have been even stronger as we come into September," Kirby told CNBC.
It's a marked change from April, when airlines warned that travel demand could suffer due to President Donald Trump's tariff announcements.
In an earnings call that month, Delta Air Lines walked back hopes for record profits as its CEO said "growth has largely stalled" due to economic uncertainty created by tariffs.
The airline industry can serve as a bellwether for the economy because travel spending is discretionary. That means it's one of the first things people cut back on when they need to save money. Corporations also tend to send staff on fewer trips when the economy is suffering.
"On the demand side, I think we're a really good real-time indicator of what's going on in the economy," Kirby told CNBC.
"I actually think the economy is stronger than some of the backward-looking statistics would suggest," he added.
Such statistics might include jobs and inflation data, which are published monthly. Inflation reached 2.9% last month, its highest level since January.
Meanwhile, Kirby said that demand for both corporate and leisure travel has "definitely stepped up."
For the airline business, however, there are still challenges.
United's CEO said that demand was better in highly profitable premium cabins, while economy seats still face pressure from strong competition.
"There's still a lot of supply in the main cabin from a number of airlines, and when you have that, there's more pressure on pricing in the main cabin," Kirby told CNBC.
This over-capacity may help passengers by driving down airfares, but that creates challenges for airline profits.
Spirit Airlines last month filed for Chapter 11 bankruptcy for the second time in less than a year. It's planning to downsize its fleet and focus on flights to its most profitable markets.
