* Airlines won't accept Qatari passengers for UAE transit
* Passengers could shy away from Qatar Airways bookings: analyst
* Indonesia says Muslim pilgrims diverted from Qatar Airways (Changes dateline, recasts with Etihad statement)
DUBAI/SYDNEY, June 7 (Reuters) - Qatari nationals will not be allowed to board flights to Dubai or Abu Dhabi because the United Arab Emirates has banned them from passing through its airports after Arab powers cut ties with Qatar, Etihad Airways said on Wednesday.
Foreigners living in Qatar with residence visas will no longer be eligible for visas on arrival into the United Arab Emirates, a spokesman for Etihad Airways added.
Several Middle Eastern countries, including Saudi Arabia, Egypt and the United Arab Emirates, cut ties with the tiny Gulf state on Monday over what they say is Qatar's support for terrorism, an accusation Qatar vehemently denies.
The United Arab Emirates had already said Qatari nationals would not be allowed to enter the country or cross its points of entry, although the practical effects on airline passengers had been unclear until now.
Qatari nationals will now not be allowed to pass through airports in the UAE even to change planes.
"This ruling applies to all airlines flying into the UAE, including Etihad Airways," the Abu Dhabi-based airline said.
The transit ban on Qataris is stricter than restrictions on Israeli passport holders who are allowed up to 24 hours to change planes at UAE airports, even though Israel and the United Arab Emirates lack diplomatic relations.
Emirates, which has its hub in Dubai, did not respond to a request for comment. Qantas Airways, a codeshare partner of Emirates, said it would not carry Qatari nationals on its flights to Dubai due to the government restrictions.
QATAR AIRWAYS HIT HARD
OPSGROUP, an industry flight operations service, said it had advised airlines of a series of restrictions on Qatari nationals, including a ban on transit through the United Arab Emirates, Bahrain, Saudi Arabia and Egypt.
Qatar Airways has cancelled all of its flights to those countries, which had averaged 55 a day before the diplomatic dispute, according to analysis published by CAPA Centre for Aviation. The airline's website says it has offered refunds or rebookings to affected passengers.
Saudi Arabia and the United Arab Emirates had been Qatar Airways' largest markets by the number of available seats and the loss of the four Arab markets could lead to a double-digit revenue decline for the carrier, CAPA said.
"A more long-term effect will be that passengers will shy away from booking with Qatar Airways," Leeham Co analyst Bjorn Ferhm said in a note published on Wednesday.
"This is the strongest accusation to date of Qatar being connected with terrorism. Many travellers and corporate accounts could blacklist Qatar Airways."
Qatar Airways did not respond immediately to a request for comment.
Indonesia on Wednesday said it had diverted Muslim pilgrims to Saudi Arabia to other airlines. An Islamic Religious Council of Singapore spokesman said alternative flights to Saudi Arabia were being sought, with less than 200 people affected.
Saudi Arabia and Bahrain revoked the licences of Qatar Airways on Tuesday and ordered its offices to be closed within 48 hours.
The transit restrictions follow from the cutting of all transport links with Qatar as part of the coordinated action. The rift has affected global oil prices, hit travel plans and sown confusion among businesses. (Reporting by Jamie Freed in SYDNEY and Saeed Azhar in DUBAI; Additional reporting by Victoria Bryan in CANCUN, Eveline Danubrata in JAKARTA and Faithin Ungku in SINGAPORE and Tom Finn in DOHA; Editing by Paul Tait)