Fleet Combat occurs when a ship combat is initiated and one or both parties involved are fleets instead of individual ships.
Fleet combats proceed in much the same manner as single combat, except for the matter of more than two ships being involved, and that the combat can last up to 300 rounds. Prior to v1.2(Beta), ships on the attacking side would fire first and then the surviving defending ships would return fire; now attackers and defenders exchange fire at the same time, although each ship must still wait to refire. When one side is eliminated, the battle is concluded. Dark Avatar feature: In the event that both sides are eliminated in the final round (a tie) the attacker survives with one HP. See ship combat for more specific details on how weapons are fired and damage dealt.
Before the combat begins, each side determines the order it will fire on the opposing side's ships. This order is based on the formula Total Attack / (Total Defense + Hit Points) (not included in this formula are Starbase assist bonuses, however any improvement to Weapons or Defence from military resources do count); the higher the result, the higher priority the target will be given. All ships in the fleet will fire on that target. If the highest priority target is destroyed, the next ship to fire will begin targeting the next highest priority ship, and so on.
The list of ships in a fleet actually reflects the order in which they will be targeted according to this priority formula. If your plan is to use smaller ships to escort capital ships, make sure you pack enough weapons on them to make them a high priority target; or conversely, balance your capital ship's offensive power with some defenses so that it does not become the priority target until later in the battle, if at all.