The globally recognized airport identifiers we’ve come to know—LAX, LGA, HOU, etc.—are determined by the Montreal-based International Air Transport Association (IATA). But how did IATA decide?
National Weather Service Codes. When identifiers were first chosen, airports used the same two-letter codes that the National Weather Service used for cities and simply added an X to the end to make it three letters long—thus LAX for Los Angeles and PDX for Portland.
City Name. Other codes were developed by taking the first three letters of a city name—ATL for Atlanta, BOS for Boston and so on. For airports that serve multiple cities, the identifier came from the first letter(s) of those cities—GSP for Greenville/Spartanburg, MSP for Minneapolis/St. Paul, etc. For an airport whose city is multiple words, sometimes the identifier is the first letter of each word—SLC for Salt Lake City, PAP for Port au Prince, etc.
The Puzzlers. But what about those identifiers that seem to defy logic, such as MCO for Orlando? Many of these airports have changed their names over the years and, rather than change their identifiers too, they are kept the same. So, while MCO made sense when the airport was called McCoy Air Force Base, it would have been too confusing to change the identifier with which those in the aviation industry were already familiar. Thus, MCO is still the accepted identifier for Orlando International Airport.
For more identifier fun, visit: http://www.skygod.com/asstd/abc.html