Squadrons are miniature battle units that fly towards enemies and deal damage upon arrival. They are deployed from long range and can deal lots of damage, surpassing the vast majority of weapons. In this game, damage is measured in terms of DPS (Damage Per Second).
Unlike weapons, you can shoot them down, forcing them to return. The health is indicated by the red bar. Squadrons also have a limited flight time, which is indicated by the blue bar. When they run out of fuel, they are also forced to return.
Squadrons are the most basic form of these things. They are later surpassed by swarms, the alien version of them. Later, drones surpass swarms, the A.X.I.S. variant of them.
Some squadrons fly straight towards the enemy while others flank the enemy. Flanking in itself is both an advantage and a disadvantage. Sometimes it can easily bombard a ship in their minimal range firing arc but sometimes it means flying straight into the weapons.