I think your right. The GPS even though it is a receiver and does not send out RF signals intentionally, it is actually making enough RF noise that they are concerned about adversely affecting stuff on airplanes that could compromise safety.
I got
http://gps.motionx.com/iphone/overview/ MotionX GPS for 99cents for my Iphone. I have not got the maps to work with the contour lines or streets yet. I think I have to figure out how to down load them right, but I hope no additional cost.
I did also find that with my Cell Phone Service off (just like Tower Signals out of range), and Wi-Fi Off, but with airplane mode on, the GPS although location services were on the GPS never locked on.
Turning off Airplane Mode with out cell phone service and without Wi-Fi did locate an lock on with the GPS. I did some tracking mode, navigate, speed est time arrival... all the goodies, but still the map overlays with streets, contour lines, ect. have to figure out.
I think Airplane mode just has to be off and I'm too far from both Cell Towers and Wi-Fi access to really give this app a try to see if it works with only Satellites in a clear Sky View.
I've heard it could take 30 minutes to get the GPS to work with only the Satellites, but once there locked on it it should hopefully work continuously as long as a good sky view. That could be done in the desert or ocean, but with tall buildings or a forest of tall trees it may not work well.
Just because I have no cell phone paid for service for my Iphone does not mean that the Iphone does not get cell tower signals that help the GPS work better as long as Airplane Mode is OFF. I saws a full signal strength for the antenna meter with Airplane Mode OFF, but nothing with it on.
I guess even for free the cell towers offer help to the GPS in the Iphone, just don't expect anything much more than that!
MT