As amazing as some of these suggestions are I believe the name's meaning is far simpler, and the 'flying launch' matching the first 2 letters a coincidence.
F.L.Y. comes from the English word "fly".
The dots are presumably just a style thing as the project name for this newly invented flying machine by the Air Rail Company. Very much a 'does what it says on the tin kind' of name.
Anyone who believes the Y stands for anything other than Yoghurt is clearly not in their right mind.Forget Logic, Yo.