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UPDATE 1-Chile Supreme Court rejects LATAM deal with American, BA and Iberia

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SANTIAGO, May 23 (Reuters) - Chile's Supreme Court on Thursday struck down a proposed joint business agreement between LATAM Airlines, the region's largest carrier, and American Airlines, British Airways and Iberia Airlines.

The decision comes more than two years after the carriers announced their plans, which at the time was seen as a bold move to save costs and coordinate prices, but also raised some antitrust concerns.

LATAM shares were down around 0.6%, in line with the broader Chilean benchmark index.

The decision in Chile could also spell trouble for a separate group of airline competitors, who had announced a similar deal of their own to take on the LATAM alliance.

Late last year, United Airlines, Colombia's Avianca Holdings and Panama's Copa Airlines announced a joint business agreement to share routes across Latin America. That deal is also waiting on regulatory approval but is at a much earlier stage.

LATAM did not immediately respond to a request for comment.

Chilean consumer advocacy group Conadecus appealed the initial regulatory approval last October over concerns it could increase fares and lower quality on routes.

Authorities in Uruguay, Colombia and Brazil each approved the deal last year. (Reporting by Erik Lopez; writing by Dave Sherwood and Marcelo Rochabrun; editing by Jonathan Oatis and Sandra Maler)