United Airlines (NASDAQ) shares gained 5.5% in preopen trading Tuesday, after United Airlines provided investors with a better than anticipated guidance update after the close.

The Chicago-based airline said it now sees total revenue per available seat mile up 23%-25% from 2019, versus its prior forecast of up 17% as customers return to flying.

United Airlines has a significantly lower capacity than 2019 and is expected to remain so. According to United Airlines, the capacity of its aircraft is expected to fall 14% by 2019, as compared to its earlier guidance of -13%.

Despite strong travel demand, United faces challenges from rising fuel prices. United estimates that the average fuel cost per gallon for aircraft is $4.02 per gallon, an increase of 17% over its previous guidance of $3.43.

However, the Adjusted Operating Margin was still 10%. It suggests the company has no problems passing higher fuel costs onto travelers.

An update by the company was welcomed with enthusiasm by analysts. Helane Becker, Cowen analyst, commented that “Management’s updated estimates reflect continued demand improvement which is consistent with our forecast.” This stock is still rated Outperform by Helane Becker, who believes that these shares will sell at $86.50 (or 8.0x 2023 EPS forecast).

This news also brought a bid to United Airlines’ competitors, who are expected to experience similar demand. The shares of American Airlines and Delta Air Lines rose 3% each in pre-open trade, while Southwest Airlines rose 2%.