On most modern airlines, flying standby occurs when a passenger travels on a flight without a ticket for that specific flight.
First, a missed flight may require a passenger to fly standby on the next flight to the same destination, since he now lacks a ticket.
Secondly, a passenger may arrive at the airport early (whether accidentally or on purpose) and notice that an earlier flight exists. He will then attempt to travel standby on the earlier flight, and failing that, proceed to take his booked flight.
Employees of the airline and/or other airlines (such as those in an alliance with the airline) and some of their family and friends may also travel standby, often at lower than normal fares or for free. They usually have lower priority than regular passengers and will only be allocated a seat after all passengers paying a regular fare have been allocated seats. It can even happen that an employee traveling standby takes his seat on the aircraft, but is then asked to vacate it to make way for a regular passenger.
Depending on the policy of the airline, some airline employees in crew member positions (such as pilots and flight attendants) may fly standby in the aircraft's jump seat if all of the passenger seats are filled.
Passengers on the standby list are typically given 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 will have higher priority than someone who purchased a 21-day advance fare.
Flying standby is easiest with carry-on luggage only, but checked luggage can be used as well, although pains must be taken to ensure that it arrives at the destination ahead of or at the same time as the passenger.
Individual passengers usually have higher success rates in obtaining a seat on standby than parties with two or more. Parties who wish to be seated together have a very low success rate, due to the fact that most standby seats are scattered throughout the plane. The airline will recommend that parties split up and not sit together for a better chance of making a particular flight.
Some discount airlines, Southwest Airlines in particular, have policies that only allow full fares to standby. This means that if you purchase a discounted airfare like a web-only fare or 14-day advance ticket, you would not be eligible to fly standby unless you upgraded your ticket to a full-fare (unless the original Southwest Airlines flight is delayed, in which case no upgrade is necessary).