In this study powder metallurgy and thixoforming methods are used together to manufacture aluminum alloy based composite materials reinforced with Nb2Al particles and glass bubbles (GB). Fresh scrap recycled aluminum chips, AA7075 received mainly from Brazilian aeronautic industry, are used as the raw material. Processing parameters of the manufacturing techniques were optimized and the distribution of the reinforcing particles as well as their interfaces with the matrix were analyzed. The mechanical properties of the newly designed composite material were determined by compression and bending tests. Very detailed interface analysis and microstructure and fracture surface evaluations were performed by Scanning Electron Microscopy (SEM). The results indicate that the proposed combined powder metallurgy and thixoforming method yields metal matrix composites with good mechanical properties. A non-linear finite element model (three dimensional) was used to simulate the bending and compression behaviour of Al-Nb2Al composites. A subroutine, VUHARD, was written to use with ABAQUS to analyze the effect of thixoforming and sintering on the micro and macrostructure of the manufactured materials. Different ratios of reinforcing particulates (Nb2Al, Glass Bubbles) used in the experimental specimens were used in Representative Volume Element (RVE) for the microstructure modeling. Numerical models for the macrostructure were created using these micro-structures. It has been observed that there is a good agreement between numerical analysis and experimental results. Proposed process offers an original method for the production of newly designed composite material from recycled waste aluminum that can have a major impact on the energy consumption in the aluminum industry, and when enhanced with the numerical tools for simulation it can lead to the development of better performing materials for the aviation industry.