The largest and newest German Signal Intelligence service was that of the Air Force. The newly established Luftwaffe relied on the Army for its signal intelligence needs for the first few years, but then established its own service on January 1, 1937,  the Chi Stelle, OB d L. Starting with one officer and twenty civilians, it grew into an intelligence force of 13,000 by 1945. Its outstanding achievement during the war was what TICOM described as ‘….signal intelligence without cryptanalysts’. Its skill in interception and traffic analysis enabled the Chi Stelle to exploit all sorts of Allied radio emissions; radar, navigation beacons and radiotelephone chatter, which created a reputation for yielding valuable tactical and strategic intelligence. For instance, as early as December, 1939 Chi Stelle units detected a large formation of British Wellington bombers over Northern Germany and were able to provide the location, height, speed and size of the formation to the defending Luftwaffe fighters. This taught the Germans that signal intelligence would play a critical role in air raid defenses.

The Air Force Sigint service paralleled the army service in that it had a central analysis and administrative center, the Chi Stelle, located in Potsdam. At the start of the war, it had 10 mobile intercept companies and 14 fixed intercept stations under the cover of “weather stations”. As the war progressed, the Luftwaffe organized radio reconnaissance battalions for each air fleet supported by a fixed station back in Germany. Eventually the field service was organized into three radio reconnaissance regiments; the 351^st covering the western front, the 352^nd in the Mediterranean and the 353^rd in Russia.  The Chi Stelle headquarters in Postdam was designated the 350^th Battalion and was divided into a number of geographic evaluation sections along with its administrative departments.  Following the German decentralized philosophy, the Chi Stelle sent a number of detachments forward to support the field forces, and TICOM concluded ‘…it was considered more effective to have the long-term evaluation center close to the intercept units rather than close to the staffs which they have to feed.  However, as the war drew on, all of these detachments eventually merged into evaluation companies for the Air Signal regiments and battalions they served.

Facing the much more difficult cryptanalytic challenge in the West, the Chi Stelle relied heavily on interception and traffic analysis for rapid response. The Chi Stelle and its field tactical units became the prime source of intelligence for the Air Raid Warning Agency of the Reich, a function that became critically important as the Anglo-American bombing campaign developed in 1943-45. They developed sophisticated techniques for intercepting Anglo-American radar and navigation systems. Eventually the Germans were able to track the exact strength, composition and probable targets of enemy bomber raids in near real time.  David Kahn concludes:

“German air force radio reconnaissance gave advance notice of many Allied raids, and indeed provided 70 percent of and the most valuable intelligence about the enemy that the Luftwaffe received. But German flak and fighters were often too weak to do much against the broad and endless stream of Allied bombers. In the end, air radio intelligence did little more than to prove once again that knowledge without power is worthless.”