I have used mine on the last 4 flights I was on. It depends on the airline, as well as the captain. The captain of the plane has the authority to say no and remove you from the flight.
My father got in serious trouble for simply taking a photograph of my mother on a flight and it got ugly. Simple advice he gave me afterwards is if they say no, do not argue. You lose a lot of your rights while on a plane :)
While on a recent Continental flight, I checked their in-flight magazine and saw that GPS receivers were allowed above 10,000 feet. So when we got to that altitude, I pulled mine out. Shortly afterward the flight attend told me, "no," and I shut it down but pointed out it was supposed to be allowed. He consulted the magazine, apologized, and let me use it, saying that this was a recent change that had not flowed to him yet.
If this is true, it's good of Continental to make that change. I like knowing what the name of the lake or feature is that I'm passing over and how much longer it will be until we get there, etc.
Brad, 1/2 of Team Nine Lives
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