"Co-terminal" is a term given to airports that are considered "the same point" for fare construction purposes. The term is often misinterpreted by laypersons to apply to all airport-specific policies, e.g. standby, but this is not the case.
Fares are almost always published based on cities/regions, not airports or groups of airports. (An exception is for airport-specific fares, e.g. YCAIAD, where the fare is, in fact, specific to one airport.) An itinerary that includes arrival to and departure from different airports (an "open jaw", e.g. arrival into XYZ, departure from ABC) often does not fulfill the "combinability" requirement for round-trip, stopover, or circle trip fares, causing such itineraries to be fared as multiple one-way trips instead of a (usually cheaper) round trip or circle trip [with stopover, if applicable].
The "co-terminal" designation was created to bypass this problem for airports within the same general metropolitan area, where surface travel between airports is common, reasonable, and expected (e.g. the SF Bay Area; the DC Metro Area; etc.). Airports designated as co-terminals are considered to be the same point for fare construction purposes, allowing itineraries that include open jaws across co-terminals to still count as a valid round trip (or circle trip, and/or including stopover, if applicable) and thereby fulfill the combinability fare requirement (except in cases where the fare is airport-specific).
United's list of co-terminals is outlined in S*FAR/COTERMINALS; as of 1 Nov 2008, for domestic travel, that list is:
BWI-WAS FLL-MIA FLL-PBI MIA-PBI LAX-ONT LAX-BUR LAX-SNA ONT-BUR ONT-SNA BUR-SNA NYC-EWR NYC-HVN NYC-HPN NYC-ISP EWR-HVN EWR-HPN EWR-ISP HVN-HPN HVN-ISP HPN-ISP OAK-SFO OAK-SJC SFO-SJC (WAS = IAD/DCA; NYC = JFK/LGA; CHI = ORD/MDW)
Individual fares may specify other airports that also satisfy combinability requirements for fare construction; the above list is the default that applies to most fares, however.
The "multi-airport city" is a designation given to certain regions where multiple airports are considered to be within the same city (although in practice, "city" is rather loosely interpreted). Airports that belong to a multi-airport city are considered to be "the same point" not only for fare construction but also for purposes of routing, e.g. for standby, flight changes, etc.
WAS (IAD/DCA), NYC (JFK/LGA), and CHI (ORD/MDW) are the current multi-airport cities as defined by S*FAR/COTERMINALS.
Co-terminals are entirely irrelevant for standby; the co-terminal designation applies to fare construction only and does not apply to standby travel policies. Current policy (c.f. S*FAR/COTERMINALS) dictates that standby between co-terminals is not permitted and requires a refare. (In practice, some agents will allow standby between co-terminals, but this is disallowed by policy.) However, standby is explicitly permitted between airports that are part of a multi-airport city (c.f. S*FAR/STANDBY), e.g. between IAD and DCA, JFK and LGA, or ORD and MDW, except when the fare is airport-specific.
Irregular Operations and Involuntary Refunds
When due to weather or other issues a passenger is unable to reach her destination or next stopover, the normal procedure is to refund a portion of the fare. (The proportion is calculated by comparing the unrestricted Y fare between the origin airport and intended destination with the sum of the Y fares between the origin airport and the intermediate point and the intermediate point and the destination.) In the odd case where a flight is forced to land at a co-terminal to the destination airport, United's Contract of Carriage states (Rule 260(B)) that instead of a refund, ground transportation will be provided free of charge to the destination airport. The list of co-terminals in Rule 260(B) is different from the normal co-terminal listing. As of December 2009, the current list of airport parts for this purpose is:
BALTIMORE, MD WASHINGTON, DC (IAD AIRPORT) BALTIMORE, MD WASHINGTON, DC (DCA AIRPORT) CHICAGO, IL MILWAUKEE, WI CHICAGO, IL (ORD AIRPORT) CHICAGO, IL (MDW AIRPORT) COLORADO SPRINGS, CO DENVER, CO LOS ANGELES, CA ONTARIO, CA MIAMI, FL FT. LAUDERDALE, FL NEWARK, NJ NEW YORK, NY (JFK AIRPORT) NEWARK, NJ NEW YORK, NY (LGA AIRPORT) NEW YORK, NY (JFK AIRPORT) NEW YORK, NY (LGA AIRPORT) SAN FRANCISCO, CA OAKLAND, CA SAN FRANCISCO, CA SAN JOSE, CA WASHINGTON, DC (IAD AIRPORT) WASHINGTON, DC (DCA AIRPORT) LONG BEACH, CA LOS ANGELES, CA LONG BEACH, CA ONTARIO, CA
Note that this omits some co-terminals but lists others, like MKE-CHI(ORD/MDW) and COS-DEN, that are not co-terminals under other rules. It also lists LGB, even though United does not currently offer regularly scheduled service to Long Beach.