The Alliance was founded in 1992 by Peter Simmons, 7 squadrons were made, each with an unique mission objective.
These were those squadrons:
Red Squadron, training;
Blue Squadron, Fleet reserves;
Gray Squadron, Heavy assault;
Green Squadron, R&D (testing the B-wing);
Gold Squadron, advanced intercept and armed recon;
Black Squadron, Covert Ops;
Rogue Squadron, the elite, anything.
Shortly thereafter two more squadrons joined.
Praying Mantis Squadron, Heavy Assault and Escort;
Kalidor Squadron, Black Ops.
In time Gray and Green traded places, with Green taking on Heavy assault and Gray being in charge of testing the Super X-wing and Z-95b.
All in all, things fared well and due to an incredible chain conjured up by the then Blue XO, Matthias "Blackjack" Krenzel, and the Banshee Rory (then mascot of Red Squadron) the Alliance is able to capture the Imperial Stardestroyer Octavian (read POV: "Stowaway Onboard"), which is later given to Blue Squadron as a Flagship which was renamed to the Alliance Stardestroyer Happy Jack and repainted with a happy face on the main hull.
But in the meantime, things did not go well for others. Praying Mantis, the all female squadron, lost more than half of it's pilots, and seeing as there are not many female pilots around, they opted to open their ranks to allow anyone to enter and changed their name to White Squadron
Black Squadron fared the worst, their leader, Roger "Crash" Rollins, was lost during one of their missions and that ultimately led to their demise.
The dark year
With the finding of Internet things changed. It became clear that this new form of media would be the future of the squadrons.
Unfortunately it did not go as smooth as would have been hoped, instead activity fell and pilots dropped out.
The more extreem cases was White, who all of the pilots left to form Wolfshead Squadron due to personal reasons. Others were Gray and Blue Squadron who only had a handfull of active pilots left. If this was really due to the moving to internet or to constantly changing commands is unknown.
The leaders of Gray and Blue thought felt it wise to try a merger of the two squadrons. However this did not work, Blue Squadron died out and was declared disbanded in the 3rd quarter of 1996 and Gray slowly died away into oblivion too.
More than a year after Gray Squadron re-appears, as did Blue, using the same mission objective and with Mark Shurtleff as Commanding Officer and Jonas "Groznik" Malmlof as Executive Officer. Things are looking up.
Sword Of Freedom
After Blue Squadron disbanded the Happy Jack was sent to defense the Alliance Headquarters and the smiling face painted over, on the orders of High Command.
So the Blues got assigned to the Frigate Loyal until the then Blue Leader, Jonas Malmlof, could pursuade High Command to let Blue Squadron be stationed on the Happy Jack once again.
When the time came to move, Groznik gathered the hangar crew of the Happy Jack and asked them to help him re-do the smiling face. Some of them having been on the Happy Jack since it's earlier days agreed to help and soon the Jack was Happy and smiling once again, and Groznik was given command of the squadron with WeatherMan as his XO.
Change of Command
A year and a half after Groznik took command of the squadron, he retired, and later joined Wolfshead Squadron, leaving Atruejedi in command. Many were sad that Groznik had left, but were also happy that Blue would continue on without him.
Month of Darkness
Four months after the switch in command, Blue was put to the final test of how well it could survive. The formation of three new squadrons, Justice, Echo, and Phantom, left openings for pilots.
Pilots transfered to other units and new squadrons, leaving Blue with a reduced number, and a fight between one of the Blues and someone else outside of the Alliance left Blue without a command ship and a place to launch missions from.
Reluctently, Command disbanded the squadron once again.
A month after the disbandment of Blue, one of the former squadron members, Wedge, took charge and made an attempt to revive the twice-dead unit.
With help from members of Justice, Phantom, Buccaneer, and Wolfshead squadrons, Blue started up once again, this time determined to never again go under, and to always be ready.
Things do indeed look bright once again for the squadron.