As war loomed, both the Allies and Germany were aware of the significance of the strategic and geographical position of Portugal and its North Atlantic islands. In 1937 the German Minister of War visited both Portugal and the Azores and the German High Command drew up plans called Operation Felix for the invasion of Portugal and the Azores.
In 1938 the British sent a 129-strong military mission to Portugal that also included some military supplies, thus signifying their intent to fulfil the terms of the ancient Treaty of Windsor (1373). In 1836, the British Prime Minister, George Canning, said “...whilst Great Britain has an arm to raise, it must be raised against the efforts of any power that should forcibly attempt to control the choice and fetter the independence of Portugal”. Salazar (dictator 1931-1970) drew comfort from this treaty although it is extremely doubtful that Great Britain could have fulfilled their commitment in 1940 when she herself was being threatened. Salazar, who was carefully evaluating Portugal’s position, declared his country neutral with which both Great Britain and America agreed.
Both the Allies and Germany realised the significance of submarine warfare from the experience of WWI, perhaps Grand Admiral Doenitz more so. Great Britain was reliant on receiving food and war materials from overseas by ship. Convoy routes were, firstly, the northern route passing Greenland and Iceland secondly, the southern route from North America to Freetown and travelling northward, thirdly, the route northward from Cape Town, and finally, the route through the Mediterranean passing Gibralter. As the Battle of the Atlantic became more and more intense, the Germans had an early advantage. After the fall of France more and more submarine bases were built on the Bay of Biscay. The Luftwaffe had an air base near Bordeaux, which was 400 km nearer than the RAF Coastal Command base in Plymouth. It became increasingly obvious that air power would be a deciding factor for both attack and defence. Allied shipping losses mounted throughout 1940, 1941, and 1942, when over a thousand ships were sunk in one year.
Throughout this period, Salazar presented an enigma to the Allies whereby he continually obfuscated, evaded and obstructed them in regard to providing them with access to the Azores. Finally, when Axis forces in North Africa surrendered to the invading Allies, Salazar felt safe to come out on the Allies side and signed an agreement on 18th August 1943 for an airfield to be built in Larjes on Terceira Island. The effect on the U-boat war was almost immediate and in November of the same year an RAF Flying Fortress using Lajes airbase had its first U-boat kill. This new air strike capability, together with the Allies technological advances such as submarine detection devices (ASDIC) swung the battle in the Allies favour.
The Battle of the Atlantic consisted, in the main, of convoys of ships escorted by escort groups battling their way across the Atlantic whilst being attacked by U-boats often hunting in groups called wolf packs, The largest convoy consisted of 167 ships and fresh convoys reached the UK practically every day. In total over 3.300 ships were lost representing some 6 million tons. The Allied death toll was over 30.000 men.
Towards the end of the war, Winston Churchill said “The U-boat attack was our worst evil. It would have been wise for the Germans to stake all upon it”.