IC isn't as valuable to Germany in this scenario as manpower, and Luxemburg doesn't have enough manpower to repay what I'd lose defending it 1939-1940.
A navy and bombers are the high-IC low-manpower items, and I haven't built either. If I can successfully Seelowe Britain I won't need to spend much IC constantly repairing my fighters either.
Speaking of Seelowe, to do Seelowe without a navy against beefed up UK, you need effective air recon. Anytime your air unit is above an enemy province, you get an accurate count of how many divisions the enemy has in that province. Bombing is even more effective, since you can look at the combat screen and see exactly what divisions are there, but really what matters most is just the number, not the composition. The UK doesn't build any of the realy meaningfully weak divisions, like cavalry or militia, and on beach guard duty, the difference between 3 arm and 3 inf is smaller than the difference between 3 inf and 6 inf.
With a stronger UK airforce and Commonwealth planes everywhere too, you can't get this info during the day lest you draw the wrath of a hundred angry fighter wings, but night missions are an effective way to do it. The AI always runs daytime missions and never nighttime ones, so with the right timing you can fly around over Britain unmolested. You do have to micromanage the timing, you can't just set it to an autotimed night mission - otherwise you'll run into enemy fighters in the early evening coming back from their daytime missions, or your fighters will take off a couple hours early and get massacred because your AI thinks that night mssions mean getting to the target province just as night falls, not doing the whole flight path in the dark.
It's still best to use fighters. Actually bombing the enemy isn't the point, and if you do get the timing wrong, fighters will get shot up less. Nighttime air superiority mission over a certain province is a good, low-risk source of the basic number, nighttime bombing if you need the exact division info, but either way, ironically, run your recon missions at night.
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