It took just three minutes for the hosts to breach the Larne defence for the first time on the night as Katai beat the offside trap and fired into the bottom corner.
Katai thought he had his second 13 minutes later, but saw his header ruled out for offside by video assistant referee [VAR].
Just as it looked like the visitors would be going in at the break one goal behind in the second leg, Arnautovic struck with a powerful effort into the roof of the net to double the hosts' advantage on the stroke of half-time.
Despite making multiple key saves in the first half, Rohan Ferguson gifted Red Star their third goal just four minutes into the second half after he misplaced a pass into Loizou's path, who calmly converted.
Arnautovic grabbed his second of the night on the hour mark with the easiest of tap-ins before substitute Bukari put the icing on the cake for the Serbian champions with their fifth 11 minutes from time.