If you have a greater Luxembourg encompassing say the Belgian Luxemburg plus maybe a few extras tacked on then with a population approaching say 1.2m then why not have a single small wing of fighters? So 1947 we see them with some second hand Spitfires in the wing, plus a squadron of Magisters, one of Rapides, Ansons and Dakotas, maybe a flight of Austers for the brigade plus of the Luxembourg army.
(That by the way being 6 infantry battalions with national service plus AA, field artillery, engineer, signals, transport, etc regiments, maybe even a tank regiment operating Centurions from the late 50s through to the 70s, I'd also add a distinct and separate paramilitary ducal Guard as there was actually some form of this OTL)
In the 1950s the fighter wing starts to get Vampires then Venoms with the vampires given to the training sqdn. Later on Hunters pop up, Venoms gone, maybe some Jet Provosts are obtained. Perhaps we get the first few helicopters too. By 1970s Luxembourg is in the NATO common fighter programme and therefore gets the F16 to the tune of 20 F16A and 4 B. these are accompanied by a dozen Alpha Jets used for training and light strike. Other elements are a half dozen light helicopters (if bought pre 1970 then its Allouette 3 otherwise could be BO105?) transport force rather different with a couple Andovers, couple C130 or Transalls, couple exec jets for the Duke and Govt.
Army equipment in 1980s through to the end of the Cold War pretty much same as Belguim.
By today the army is reduced in scale to 1 field battle group plus one ranger/tier 2 SF company plus training assets and logistics group. The Ducal Guard is 'just as it always was' that is a semi military semi police quasi commandoised gendarmerie a reinforced battalion equivalent with around 7 companies (usual HQ unit and training unit) rest being a general duties company used for patrolling public events and the airports, 1 special duties company (think anti terrorist plus other tasks), public duties company with the band for all the touristy requirements and 1 specialist company with the police mounted unit, canine unit and so on.
The Air Force is down to a single support squadron with helicopters and exec aircraft, also personnel flying in NATO joint units, all training done in Canada. The F16s were sold off to Turkey with the end of the Cold War.
That I think would be a fairly realistic picture for a bigger Luxembourg.