UPDATE 2-TUI confident of coping with economic changes

* Confident will significantly grow opg earns in 2008

* TUI Travel to continue to adjust capacity

* TUI Travel shares up 4.9 pct, TUI up 1.7 pct (Rewrites lead, adds detail)

By Eva Kuehnen

FRANKFURT, Nov 14 (Reuters) - Germany's TUI AG (TUIGn.DE), owner of Europe's biggest travel company TUI Travel (TT.L), remained confident on Friday it could weather a global economic downturn by cutting capacity and raising prices.

The world was changing, Finance Chief Rainer Feuerhake told analysts in a conference call, but TUI could cope with it.

The group, which is selling container shipping arm Hapag-Lloyd to focus on tourism, said it was confident it would achieve a significant increase in operating earnings this year.

TUI shares rose 0.6 percent to 8.815 euros by 1322 GMT compared to a 1.7 percent gain in the mid-cap index .MDAXI.

In London, TUI Travel shares rose 4.9 percent to 194.2 pence, outperforming a 3.1 percent rise in the FTSE 100 .FTSE.

TUI cut its outlook for European travel market growth to 2-3 percent in 2008, from an earlier forecast of up to 5 percent. The container shipping market would grow 4 to 5 percent, less than the previously expected 6 to 8 percent, it said.

TUI Travel's customer volumes fell 6 percent and capacity was reduced by 8 percent during this year's summer season. TUI said such capacity adjustments would continue in the winter season 2008/09 as well as the next year's summer season.

It said it had reduced capacity by 16 percent for next year's summer season in the UK, and while volumes have been 17 percent lower to date, average selling prices were up 11 percent compared to the previous year.

"It's textbook what the management is doing. They've taken out capacity, probably more than the anticipated fall in demand, and are keeping supply and demand very tight," said Collins Stewart analyst Andrew Fitchie.

"That's the only thing they can do and they are doing it very well," he added.

Other analysts were more concerned about TUI's earnings performance in Germany next year.

"We are getting more sceptical over earnings in 2009," WestLB analysts said, adding that there was a high risk that the German market would also suffer from the economic downturn.

Third-quarter sales of TUI's tourism operations jumped 17 percent to 6.84 billion euros ($8.68 billion), benefiting from the first-time consolidation of First Choice, which TUI bought last year to create TUI Travel.

But the consolidation also led to a 41.9 percent decline in the group's quarterly net profit after minorities to 256.1 million euros, which came in at 448.3 million before minorities.

In container shipping, TUI said it still expected a significant profit increase this year, with positive earnings for the fourth quarter, despite a broader industry slowdown.

The world's seventh-largest container shipping line, Singapore's Neptune Orient Lines (NOL) (NEPS.SI), which was also in the race to acquire Hapag-Lloyd, the world's No. 5, posted an 82 percent plunge in third-quarter net profit in October and said it saw a pronounced downturn for shipping.

TUI agreed last month to sell Hapag-Lloyd to a group of Hamburg-based investors and now concentrates mainly on tourism activities, which include TUI Hotels & Resorts and cruises, as well as its 51 percent stake in TUI Travel.

TUI trades at about 9 times projected 2009 earnings, while TUI Travel has a multiple of 7.3, compared with 4.5 for Thomas Cook (TCG.L), Europe's second-biggest travel company.

(Reporting by Eva Kuehnen; Editing by Rupert Winchester)