Even the idea to handle the fire only on ground is not the vey best, notwithstanding the bs your instructor told you.
A fire is probably the biggest threat in flight. It has to be dealt with instantly. Therefore most manufacturers have proposed memory items, typically throttles idle, fuel shutoffs off, fire handles pull and rotate.
This mitigates the instant threat, but does not guarantee complete extinction.
As a skipper you should therefore declare emergency and land as freaking early as possible.
Most OMAs tell you that in an emergency situation you should take any measure deemed necessary as to ensure safe flight. This contains telling ATC that you WILL land now, because YOU are running the show, and it also contains to tell the instructor to try to regain some common sense.
Last edited by Gretchenfrage; 11th Jan 2013 at 10:15.