Many countries uses more or less meaningless prefixes (e.g. Poland - SP
, Latvia - YL).
In Lithuania it is more or less meaningful (LY), however still not fully, because second letter in both Lithuanian and English (and many other) variants of word "Lithuania" is "i", not "y", and I doubt in some language this word is written with "y". LT
would be more logical, as this one is used on cars also. LR
(Lithuanian Republic), LI
(LIthuania), would be logical alternates also...
But well, I guess this aircraft registration thing is just two (or one) letters and there shouldn't be made fuss about it. Same as about airport codes - Baghdad International is still SDA
(from SaDdAm) as it seems, while Ho Chi Minh international is still SGN