Southwest Airlines lifted its forecast for revenue and reduced its estimate for fuel costs for the fourth quarter. Citi analysts liked the update.

In a presentation for investors , the Dallas-based airline said operating revenue is going to be down 10% to 15 % vs. the fourth quarter of 2019, compared with previous estimates of a15% to 25% fall.

To analysts at Citi — who rate the stock at Neutral with a $53 price target — the update looked positive. "Overall, with the exceptions of higher-than-expected 2022 ex-fuel costs and higher capex … [the] upgraded guidance appears to be ahead of Citi's estimates," the note said.

The stock rose 2% to $46.11 on Wednesday.

Southwest Airlines (ticker: LUV) cut its forecast of fuel costs for the current quarter to $2.15 to $2.25 a gallon from the $2.25 to $2.35 it had predicted.

"Leisure travel demand was strong for the Thanksgiving holiday," the company said. "Based on current trends, leisure bookings continue to come in above expectations for December travel, and managed business revenues are expected to recover to down 55% to down 60% in December versus 2019 levels."

In addition, the airline cited benefit from its new five-year Chase co-branded agreement, revenue management system modernization and and fleet modernization — all initiatives that are expected to drive growth and generate $1 billion to $1.5 billion of incremental EBIT in 2023. Citi expects Southwest's EBIT at $2.4 billion next year and $3.1 billion in 2023E.

For the next year's first quarter, Southwest expects fuel costs per gallon of $2.05 to $2.15 and between $2.05 to $2.15 for all of 2022. Citi expects fuel at $2.15 per gallon for 2022.

"Southwest has hedged 59% of next year's fuel needs, with 37% hedged for 2023 and 17% for 2024," analyst Stephen Trent saId in the note.

For the third quarter, Southwest reported a smaller than expected loss due to demand recovering . Its adjusted loss per share came in at 23 cents, the company said in October, versus the Wall Street consensus call of 27 cents.