* Q3 underlying profit up 1.1 pct, sales down 5.7 pct
* On track for profit to rise at least 10 pct this yr
* Sees FY sales lower due to drop in Turkey demand
* TUI says customers shifting to Spain, Greece, Mexico
* Shares up 2 pct (Adds comments from CEO)
By Victoria Bryan
BERLIN, Aug 11 (Reuters) - TUI Group, Europe'slargest tour operator, said it was on track to meet its profittarget this year as more European holidaymakers head furtherwest and Britons remain eager to go abroad despite the fall insterling following the Brexit vote.
TUI's outlook contrasted with smaller rival Thomas Cook, which has more exposure to troubled destinations in theeastern Mediterranean such as Turkey and last month lowered itsfull-year profit forecast as it worked to move more of itspackage holidays to the western Mediterranean.
TUI confirmed on Thursday that it would deliver underlyingprofit growth of at least 10 percent at constant currency ratesin the 12 months ended Sept. 30, despite lowering its salesforecast after security concerns in Turkey and elsewheredeterred holidaymakers.
Many more northern Europeans were opting to holiday inSpain, where TUI is traditionally strong, and flying onlucrative long-haul packages across the Atlantic, instead ofholidaying in Turkey and North Africa, TUI said.
The demand for holidays in Spain means fewer last-minutebookings, pushing up average room rates this summer and helpingit to retain its profit forecast even though it trimmed itssales growth forecast to 2 to 3 percent from at least 5 percent.
TUI also said demand from British holidaymakers had not beenhit by the decision to leave the European Union.
Since the vote in June the pound has weakened against thedollar and the euro by around 10 percent, making it moreexpensive for Britons to go abroad.
"Despite the weaker pound, the desire of Brits to go onholiday has not been affected," Chief Executive Fritz Joussentold reporters. "There's been a very strong performance from theUK, bookings have risen very strongly."
Shares in TUI were up 4.3 percent at 1,055.2 pence at 0727GMT, making them the top gainer in Britain's FTSE 100 index.
The company said third-quarter sales dropped 5.7 percent,partly due to attacks causing travellers to hesitate on theirholiday decisions, but underlying core earnings (EBITA) held up,rising 1 percent to 180 million euros ($201 million) due tostrong demand for Spanish holidays.
"Spanish destinations are becoming more lucrative becausecapacity is very tight, and the prices there are rising,"Joussen said.
Adjusted for the timing of Easter and currency effects,profit would have been up 14 percent in the third quarter, TUIsaid. ($1 = 0.8954 euros) (Additional reporting by Sarah Young; Editing by Greg Mahlich)
