If mom and dad want to ride say Space Mountain and rider swap, I assume they would both need Fastpasses. Is this correct?
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No, not correct.
The initial riders need fast passes (or do the standby queue). At the start of the line (at the point where you go under the queue timings display, so sometimes all of you will need to queue until that point) you talk to a cast member and then they will give a temporary fastpass to those riding second. The scan the magic band/card for each rider riding second. The first party then carry on into the ride. We did this on a number of rides in AK, MK and HS this week. Also this week (Christmas week) the temp fast pass has been valid all day so you can come back later.
Thank you so much! Just making sure no one gets turned away 
First time planning this with little ones.
It worked really well for us. I booked FP for half our family on the height restricted rides, then i booked myself and dd4 on other rides or meeting characters and then we met somewhere else and we went back to use the family swap later that day. I did find it a struggle adding the family swap into the app as it looks like Disney are still playing with it and this Christmas they have set the return to be at any point that day, so no hourly slot.
There were posts a few months ago about some people who were not permitted to do what the first reply in this thread suggested (last least for for 7DMT and Flight of Passage). The posts indicated that some CM’s were only permitted Rider Switch if everyone has a FP for this rides.
I do not know if these posts were true or if anything has changed since then, but wanted to let you know. When I went to WDW at the end of November we made sure everyone had a FP for 7DMT and Flight of Passage because we didn’t want to take the risk of someone being turned away.
Perhaps someone else can shed more light on this.
This is something I wish WDW would clarify with an official rule.
This is really good to hear!
We have done both this last week, we’ve used the standby line at flights of passage and RnR and the FPP line for space mountain and family swap was allowed on both. So far we haven’t had any issues, but I agree it doesn’t mean there might not be any. We didn’t see many people using family swap so far this week!
How long did you end up waiting for FOP? I really appreciate all the feedback!!!
We got to the start of the extended queue at 7.55am (park officially opened at 8am). When we went through the gate the wait was posted as 75mins and when we hit the queue it said 90 mins.
When you go through the extended queue we did a loop just before Lion King and we were told 75 mins from there. We then were told it was about 45 mins from when you go under the digital wait time. My husband queued with the older kids whilst I took the littlest off. I think they must have opened up more queues inside as he was then told 40 mins from somewhere inside. All in all including the ride (which has different sections so it probably takes 20 mins to ride in total) it took them about 2 hours. Touring plans was pretty accurate as it said 93 mins and it was very close.
I then rode it with the kids via the fast pass you get from the parent swap and it was probably 30ish mins to do that. It’s quite a long loading process as they have to load you in banks of 12.