On most modern airlines, flying standby is when a passenger without a seat assignment waits at the gate to see if there is an extra seat after all scheduled passengers have boarded. There are several common circumstances in which passengers fly standby:
Airline employees and some of their family and friends can also travel standby, often for free or at a significant discount. They typically have lower priority than regular passengers, and are given a seat after all regular fare passengers have seats. Standby passengers may also have to vacate their seat for a full fare-paying customer.
Non-employees can get on the standby list by speaking to a ticket agent or gate agent. This usually must occur in person at the airport, and not over the phone. When the flight boards, agents give any available seats to standby passengers, who wait at the gate to be called. Standby passengers who don't get seats are rolled into the standby list for the next flight. Standby passengers typically have priority based on how much they paid for their tickets and their relative status in the airline's frequent flyer program.
A person who paid full fare has higher priority than someone who purchased a 21-day advance fare, who, in turn, has higher priority than someone who just showed up hoping to board the plane. Some low-cost carriers, Southwest Airlines in particular, have policies that only allow full fares to standby (unless the passenger's original flight was delayed). This means that someone with a discounted airfare, like a Web-only fare or 14-day advance ticket is ineligible to fly standby unless they upgrade to a full-fare ticket.
Standby for earlier flights began as a free service on many airlines, but as of April 2010, most US airlines charge for unconfirmed standby, with a USD $50 to $75 fee being common. Currently, United Airlines charges USD $75 for standby travel to all passengers except passengers on full fare tickets, 1K passengers, Global Services passengers, and premium cabin passengers. American Airlines restricts free standby to passengers with elite status or fully refundable tickets, and charges $75 to all other passengers who want a confirmed standby seat within 24 hours of their desired flight time. In all cases, distressed passengers (passengers whose flights have been cancelled, denied boarding, etc.) get free standby and highest priority.