I remember my wife was on a charter flight with 3 initial letters many years ago (in Europe). And when I tried to look up the arrival, many systems could not handle the flight number.
So IATA seems to have formally introduced that in 1994. (Whether they have abandoned it again later I don't know.) So big airlines could just get a additional 3rd letter(s). The first 2 would not have to change, which makes it easier for humans.
Now slightly unsure whether I did not dream up the whole episode, I did a web search and found https://travel.stackexchange.com/questions/157429/what-is-th...
So IATA seems to have formally introduced that in 1994. (Whether they have abandoned it again later I don't know.) So big airlines could just get a additional 3rd letter(s). The first 2 would not have to change, which makes it easier for humans.