Historically, the Weimar Republic (1920s) predecessor of Luft Hansa (Spelled in two words until the 1950s), was the DERULUFT, the Deutsch-Russische Luftfahrtgesellschaft (German-Russian Aviation Company), an airline, which was flying mostly around the Baltic, connecting the young Soviet Union, the former German eastern provinces (Eastprussia) and the Baltic states with Germany. They operated from 1921 until 1926 under this name.
In 1926, after a merger with another airline, Deutscher Aero Lloyd, the name was changed to Deutsche Luft Hansa.
Due to their main operational area, it was decided to use a name based on the medieval Hanseatic league of merchants, who´ve been trading mainly around the Baltic and North Sea, though later during the late 1920s, early 1930s, they pioneered theuse of flying boats with catapult take off for mail flights to South America and had routes to China.
The airline operated under this name until the end of WW2 in 1945, though the Nazis during their take over of the German government in 1933 let the Lufthansa administration fall directly under Goering´s Air Department (the airline was then considered to be a government department, e.g. at the beginning of the Spanish Civil War, when General Franco´s troops were stuck in the at this time Spanish colony of Morrocco (the Navy and Spanish air force refused to participate in the fascist coup d´etat), Luft Hansa was ordered to send some Ju-52 3M
planes to Morrocco to ferry the rebellious soldiers over to continental Spain. Luft Hansa was also used during WW2 for military transport flights and crew training.
After WW2, Germany was banned from having any aviation until 1956.
When the Deutsche Lufthansa AG
was founded in 1956, the name was deliberately changed into one word to show that it was a different company and not a legal successor of the pre war Luft Hansa. This way they avoided having to take up claims against the old Luft Hansa.