1) are you not attacking UK navy at all besides z109? Â what about scramble?
A) No, I am not attacking ANY UK navy other than the TT and DD in 109.  Yes, the UK will scramble.  In three victories, the DD and TT are sunk every time, and you usually survive with 2-3 SS (which are then destroyed on UK1).  The primary objective is to eliminate their “lift†capability.  If they can’t hit any coastline, I’m free to move everything out of Norway.
In just about every game I’ve seen, the German SSs don’t last very long, usually with none left past Turn 2.  It’s best to use the as fodder and take out what you want.  In this case, I eliminate that TT without risking planes.  The UK simply has too many starting DDs and planes to take out my subs.
B) The secondary benefit is that it may shift the UK player’s thinking towards building a navy (best route to victory here).  This removes pressure from Italy and makes taking Egypt easier.  Germany lands 3 Ftr & 2 Tac in Southern Italy Rd1.  If the UK doesn’t spend anything in South Africa or build a minor factory in Egypt, Italy has enough units to take Egypt.
C) Â The addition of landing those German fighters into Italy means an extra Ftr to scramble, making any UK1 assault on SZ97 a 51% chance of success at best (including using the UK bomber that lands in Malta.)
So if the UK attacks SZ 97, they will have nothing but a CC in SZ 96 (that combined with the Gib Ftr to kill the italian DD TT there.
2) airstrike on West Ukraine seems pretty high risk for modest benefit
It depends on who you are playing against as Russia.  The best defense against this smash and grab is for RUS to counterattack Rd 2.  The Inf and Art can be used to take back Bessarabia.  Because if RUS doesn’t, the Ukraine is guaranteed to fall G2.
To throw some numbers out there, if RUS goes “all in†on defending the Ukraine and doesn’t retake Bessarabia, buys 3 FTRs Rd1, and moves everything it can there, they end up with 3 Inf 2 Mech 2 Tanks, 5 Ftr 1 Tac.
Germany can bring 4 Tanks, 4 Ftr, 5 Tac, 2 Bombers. Â 90% of victory. Â
The key is to prevent RUS from counter-attacking and pushing G1 back.  Each territory lost to RUS is one more turn the US gets to help out.  If RUS doesn’t push them back, Moscow is down Rd5 or Rd6.
3) Russia might strafe Baltic States and retreat to Novgorod or Belarus
Any counter attack in the Baltic States is irrelevant. Â At the end of G1, there are 10 Inf 2 Art in Poland and 8 Tanks in Germany. Â On G2, Poland and Eastern Poland forces converge on the Baltic States along with 11-12 Tanks. Â Planes land in Poland, and 7 Inf move into Karelia. Â Novgorod gets hit by everything G3. Â 17 Inf, 10+ Tanks, and as much airforce as needed. Â There is 0% chance of RUS holding onto it.
The best I could raise it was to 1% if RUS buys 9 Mechs and moves them to Novogrod, buys 3 Ftr Rd2, and Germany uses none of its airforce in the attack.
- what is the plan for G2 and beyond? Â
Attacking G1 with everything puts enormous pressure on RUS.  The hope is the Allies get distracted by a big UK navy and don’t end up sending any planes to Moscow.
As Japan doesn’t attack at all, the US can’t help out until Rd 4.  And if the UK focuses on building a navy, Italy will have a great chance at Egypt.
Because Germany is moving everything East, and saving units by not attacking Yugoslavia, they can buy just Tanks. Â Rd1 5 Tanks. Â Rd2 10 Tanks. Â Rd3 6 Tanks, 2 Inf 1 Art.
Germany after Rd1 should concentrate their airforce to remind the UK how much protection they’ll need.  If they under buy or divide their navy, they can be piecemealed.  Beyond Rd 3, G has enough units to take Moscow but should keep adding 3 units in the Ukraine as you advance.  The rest becomes counter-attack forces in France.  For every two units Germany places, the UK has to counter with the added cost of a transport.
As Germany can’t compete ship-for-ship while spending so much on land units, they amass their airforce to buy time, reminding the UK how much protection they’ll need. 4 Ftr 4 Tac 2 Bombers would give any navy pause.  They have to overcome that with ships, buy transports, AND buy enough guys to land.  That’s a tough thing to do with under 30 ICs a turn.
Germany should focus more on Inf Art in France.  Leave the coasts clear and push them back off with your land units and planes.  The Germany navy will park in SZ 113, and you can land 2 units and planes in Norway if they try to “sneak aroundâ€.  So keep a couple units in Western Germany with your airforce, several units in France, and fend them off till Moscow is down.
The tricky parts for the Allies is how does the US spend their money, and what the UK player decides to do with that starting navy.
In the three loses, they came down to poor decisions that arose from not having seen this strategy before. Â They were:
Lose 1: Â The UK focused too much on their navy and handed Egypt over to Italy. Â The US went north to help with the continued Normandy landings (that were getting pushed off each turn by Germany), but RUS fell too fast, and their transports were only on Normandy by games end and not a VC. Â Victory Axis.
Lose 2:  The US bought too much protection and too little transports.  This time they went for Rome, having only one chance.  But since Italy had little to do but purchase INF, and they were backed up by German planes, the US couldn’t take Rome.  Victory Axis.
Lose 3:  The US overcompensated by doing their own “all-in†against Germany, going so far as to move the Pacific fleet over to Europe.  This lead to a Japanese victory (India-Hawaii).  Japan did a J4 India crush move, then saved and dropped down enough protection for their existing TTs and took Hawaii.  When the US saw what they were doing, they couldn’t get anything into position in time.