The United States is to stop managing Afghan airspace by the end of June after its air-traffic control contract with the government in Kabul expires, a development that could see international airlines forced to cancel flights both into the country and over its territory.

Unless a solution — even a temporary one — is found, Afghanistan would basically become a no-fly zone, which would cost the government millions of dollars in revenue and seriously damage its credibility with overseas donors and investors, officials and diplomats in Kabul warn.

The Afghan airspace, a key air corridor between Europe and Asia, has been managed by the U.S.-led international military coalition or foreign companies paid by donor countries since 2001, when the Taliban regime was overthrown in a U.S.-led invasion.

The air traffic over Afghanistan, as well as to and from the Central Asian country generates about $33 million a year, according to Mohammad Qassim Wafayezada, the Afghan Civil Aviation Authority's deputy director general on policy and planning. International airlines that fly into the Afghan capital include the Dubai-based Emirates, Air India and Turkish Airlines. Many other airlines fly over Afghanistan.

There are no flights to and from the European Union because the Afghan Civil Aviation Authority is not recognized by the bloc, which cannot certify it due to safety deficiencies.

The current contract on Afghan air traffic control, paid for by the United States, ends June 30 and failure to renew it will mean that foreign airlines will not be able to use Afghan airspace.

It may be a scenario difficult to imagine but at the core is Kabul's reluctance to take over responsibility for its airspace and put a new contract in place — paid for from its own budget.

This is likely contributing to donor fatigue, diplomats say.

"The international community does not want to be in a situation where we are continuously stuck with paying for this because they (Afghan authorities) are simply not seriously going to take it over," a Western diplomat in Kabul told The Associated Press. "This is causing reluctance with some of the partners who would otherwise bridge the gap."

According to an internal NATO memo seen by the AP, the U.S. government will not extend its current contract for another six months, to the end of 2015 — an extension that requires $25 million. The memo offered no insight as to U.S. reasons and officials at the U.S. Embassy in Kabul declined an AP request for comment.

Meanwhile, Japan is considering dipping into its development fund to cover the second half of 2015. Tokyo would be willing to let the Afghan government use $25 million from its Counterpart Fund for a "bridging contract" until the end of the year, a Japanese official said.

Tokyo's approval, however, is conditional on the contract not facilitating military operations in Afghanistan, which is prohibited under Japanese law, the official added.

"Our government is considering" this, the official said. "We think (a decision) should be very quick — hopefully before the expiry of the U.S. contract."

Both the Western diplomat and the Japanese official spoke on condition of anonymity to discuss ongoing talks on Afghan air traffic control.

Wafayezada, the official at the Afghan Civil Aviation Authority, said Kabul is confident Japan will step in.

Then, Afghanistan would take over managing its airspace from January 2016, he added. Kabul was supposed to take over at the start of this year, but Wafayezada said "technical issues" prevented this.

Now, the government is considering several bids from foreign companies to take on the contract from next year, he added, without elaborating.

Carriers need 30 days' notice of the end of airspace control and if a new contract is not in place soon, NATO will have to inform airlines that Afghan airspace is no longer managed and that they should change routes.

The internal NATO memo stressed that "if no tangible progress is made" in the next two-three weeks, the international alliance will start preparing such notices.

"Such a notification would likely stop international carriers from flying to Afghanistan, causing severe revenue impact, severe follow-on economic impact and a major defeat in building investor confidence," the memo said.

The implications of unmanaged airspace are serious. In changing routes, airlines would potentially incur higher fuel costs that would inevitably be transferred on to customers. Existing restrictions on use of airspace in other places, such as Syria and Iraq, would further complicate alternative flight paths.

The credibility of the government of Afghanistan's President Ashraf Ghani, who took over last year in the first democratic transition of power in the country, would be damaged.

And with donors already tiring of Kabul's regular need for cash handouts to cover budget expenses such as civil service payrolls, failure to take over its own airspace will likely further erode the government's political capital.

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Associated Press writer John-Thor Dahlberg in Brussels contributed to this story.

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