The upper airspace of Kosovo was reopened to commercial overflights on Thursday after Hungary agreed to provide air traffic control for private flights.
Airliners travelling between northern Europe and southeastern Europe, the Middle East and Asia will now no longer have to skirt Kosovo but fly straight over it - "a significant step that benefits the entire Western Balkans," NATO Secretary-General Anders Fogh Rasmussen said.
Reopening the air space took a long time because technical issues involving a number of countries had to be resolved, a NATO official said.
European air traffic organisation Eurocontrol estimated that around 180,000 flights a year will fly 370,000 fewer nautical miles, cutting operating costs by 18 million euros ($24.69 million).
While life became simpler for airlines over Kosovo, a new complication for them arose over Ukraine's Crimea region.
Europe's aviation safety authority warned on Thursday of "serious risks" for international airlines flying over Crimea because there may be two services managing airspace there after the region's annexation by Russia.
The 1998-1999 Kosovo war pitted pro-independence guerrillas of the Kosovo Liberation Army against security forces loyal to Serbia's then-president Slobodan Milosevic.
The conflict ended after a NATO bombing campaign ousted Serb forces from Kosovo, then a province of Serbia, in 1999. A U.N. Security Council resolution authorised an international presence in Kosovo and gave NATO authority over Kosovo's airspace.
Kosovo declared independence from Belgrade in 2008 and this has been recognised by more than 100 countries.