The priority for the German bombing force in June 1940 was to recuperate and reorganize after the effort made during the Western campaign. The bomber arm at the start of the invasion of France and the Low Countries had a strength of 1,711 aircraft with 1,084 available for service; by early July the regrouped bomber force had a strength of 1,437 with 993 serviceable aircraft. Between 10 May, when the campaign started, and 29 June, the air force had lost 1,241 combat aircraft, 51 per cent of them bombers. One-third of the bomber crew strength was lost during the same period, 446 out of 1,325 available.30
During June and July new aircraft and replacement crew joined the two air fleets assigned to northern France and the Low Countries: Air Fleet 2 under the newly promoted Field Marshal Albert Kesselring occupied an area from northern Germany to Le Havre on the French Channel coast; Air Fleet 3 under Field Marshal Hugo Sperrle (another beneficiary of the crop of promotions announced by Hitler after the defeat of France) was spread out from south-west Germany across occupied France to the Atlantic coast and the Normandy peninsula. Most of their aircraft were stationed on bases close to the coastline facing Britain.By late June it was not yet evident what direction German strategy would take now that German hegemony had been established over Continental Europe. Hitler and much of the German leadership and public hoped that the war in the West was over and that Britain would now try to seek a way to extricate itself from an unwinnable contest. In late June Hitler withdrew to his headquarters near Kniebis in the Black Forest where, according to his air force adjutant, Nicolaus von Below, ‘he sat in deep contemplation of his enemy’.31
Hitler had already speculated about the prospect of offering Britain a way to end the war, but he was not confident that a Britain led by Churchill would be likely to embrace negotiation.32 Another alternative was an invasion of southern England, the capture of London, and a dictated settlement. This possibility had already been suggested by the German Navy commander-in-chief, Grand-Admiral Erich Raeder, in meetings with Hitler on 21 May and 20 June, partly to ensure that the next campaign, if there were one, would give a higher profile to the navy. Raeder nevertheless repeatedly warned of the high risks involved with a cross-Channel assault; his personal preference was for another approach altogether, a concerted strategy of blockade directed at British trade using aircraft, submarines and surface raiders to reduce British imports and stocks to an insupportably low level.33 This was a strategic choice with strong echoes from the First World War when the German Navy had promised that unrestricted submarine warfare, launched in 1917, would sink enough tonnage every month to force Britain out of the war. Blockade was also a strategy strongly supported by the air force. In November 1939 the air staff drew up detailed target plans for attacks on British shipping, ports and food stocks. The head of German Air Intelligence, Colonel Joseph ‘Beppo’ Schmid, in a paper entitled ‘Proposal for the Conduct of Air Warfare against Britain’, argued a powerful case that in this war it was Britain which was more vulnerable to blockade. ‘Key is to paralyse British trade,’ he wrote, to counter-blockade the blockader.34