My mate OLi told me how to do it by sending me this you'll need the Aces ImageTool!
1) Start DXTBmp.exe and open one of the texture files you want to convert/compress (using file->open). It might only display bmp textures first. If that's the case, change 'files of type' to dds. You might also wanna change the view to 'details' so you can see which textures are the larges ones (~4096kb usually for those 32bit ones).
2.) Once the texture has fully loaded (take a short moment), it is displayed. Just ignore that the texture is displayed upside down, that's normal for dds textures.
3.) Make sure to untick mipmaps (right side below the alpha channel window, there's a mipmap section -> untick the 'Include when saving') This way eventual mipmaps will be removed. This makes the texture even smaller and forces FSX to use the one high res texture there is. This step is only needed to do once, it will stay unticked. You don't need to redo it for every texture.
4.) Save the texture by clicking save. Now comes the compression part. When you've loaded a 32bit texture the 'save as type' will display a 32bit format ('dds 888-8 32bit' most likely). Change that into ...
- 'DDS DXT1' if there is no alpha channel (the alpha channel window at the top right is completely white). This gives the best compression and is used for the L-39 fuse textures.
- 'DDS DXT5' if there is an alpha channel (the alpha channel window shows some grey spots and such). This gives the best compression and keeps the alpha channel intact (DXT1 doesn't do that). This is used for the L-39 spec textures.
A DXT1 texture should now be 512kb in size (32bit was 4096kb before or even more if it contained mipmaps) and a DXT5 one should be 1024kb now. That brings the texture load down quite a bit.
That's about it. You just have to redo steps 1,2 and 4 for every single texture you wanna convert/compress.
Hope this helps!