Yeap! 'Fly' works on other pokemons.
It also works on Forretress if it isn't the last pokemon.
What happens is that I use 'Fly'.. my Charizard flies up, Forretress self destructs and the next pokemon comes and my Charizard uses the Fly. (my strategy since Forretress has sturdy and self destructs)
So yeah, I think it has to do with Charizard not having a pokemon to hit/use the Fly on when Forretress is the last pokemon and faints from its self destruct.