Which phrase indicates that an aircraft is operating at an appropriate level of visibility?

The phrase "CEILING AND VISIBILITY OKAY" accurately indicates that an aircraft is operating at an appropriate level of visibility. In aviation, the terms "ceiling" and "visibility" are critical factors for flight safety and navigation. A report or announcement stating that both are acceptable suggests that the conditions are safe for flight operations, particularly under visual flight rules (VFR), which require certain visibility and cloud spacing criteria to be met. This phrase reassures pilots and air traffic control that current conditions are suitable for maintaining safe flight operations.

The other options, while relevant in different contexts, do not specifically address the visibility requirements necessary for flight operations. For instance, "CABIN CONDITIONS FINE" pertains to the interior environment of the aircraft rather than external visibility. "FLIGHT CLEARANCE RECEIVED" indicates that a pilot has been authorized to take off or proceed, but it does not speak to the visibility or cloud conditions. "VFR ACTIVITY RECOMMENDED" suggests that activities under visual flight rules might be suitable, but it isn't a definitive statement about current visibility conditions. Thus, "CEILING AND VISIBILITY OKAY" is the most straightforward and relevant phrase regarding the adequacy of visibility for safe aircraft operation.