Essentially all Pokemon that are flying or levitating can compete in Sky Battles, but here's a list;
Pokemon Eligible for Sky Battles
(Mega X and Y) Charizard , Butterfree, Pidgeotto, Pidgeot, Fearow, Zubat, Golbat, Gastly, Haunter, Koffing, Weezing, Scyther, (Mega) Gyarados, (Mega) Aerodactyl, Articuno, Zapdos, Moltres, Dragonite, Noctowl, Ledyba, Ledian, Crobat, Togetic, Xatu, Hoppip, Skiploom, Jumpluff, Yanma, Misdreavus. Gligar, Mantine, Skarmory, Lugia, Ho-oh, Beautifly, Swellow, Wingull, Pelipper, Masquerain, Ninjask, Vibrava, Flygon, Swablu, Altaria, Lunatone, Solrock, Baltoy, Claydol, Duskull, Tropius, Chimecho, Salamence, Latias, Latios, Rayquaza, Staravia, Staraptor, Mothim, Combee, Vespiquen, Driloon, Driblim, Mismagius, Honchkrow, Chingling, Bronzor, Bronzong, Carnivine, Mantyke, Togekiss, Yanmega, Gliscor, Rotom, Rotoms Wash, Mow, Fan, Frost, Uxie, Mesprit, Azelf, Giratina, Cresselia, Arceus, Tranquill, Unfezant, Woobat, Swoobat, Sigilyph, Arcehops, Swanna, Emolga, Tynamo, Eelektrik, Eelektross, Cryogonal, Braviary, Mandibuzz, Hydreigon, Tornadus, Thundurus, Landorus, Fletchinder, Talonflame, Vivillon, Noibat, Noivern, Yveltal
And last but defintely the most...
THE GOD. UNOWN
Flying/Levitating Pokemon ineligble for Sky Battles
Pidgey, Spearow, Farfetch'd, Doduo, Dodrio, Gengar, Hoothoot, Natu, Murkrow, Delibird, Taillow, Starly, Chatot, Shaymin Sky Form, Pidove, Archen, Ducklett, Rufflet, Vullaby, Fletchling, Hawlucha
>These Pokémon are not shown flying or hovering in normal battles.