UPDATE: Southwest Airlines Grounds 38 737's

Based on preliminary findings Southwest has placed three employees on administrative leave.

Southwest Airlines CEO Gary Kelly said today the airline is taking action on preliminary findings of its own internal investigation into allegations that it violated FAA regulations in March 2007.

(DALLAS) - Southwest Airlines CEO Gary Kelly said today the airline is taking action on preliminary findings of its own internal investigation into allegations that it violated FAA regulations in March 2007.

Kelly has vowed to make any changes necessary to assure that the airline is in full compliance with FAA Airworthiness Directives and all of its own maintenance programs, policies, and procedures.

"Upon learning last month of an investigation with respect to our handling of this inspection and an Airworthiness Directive, I immediately ordered an independent and comprehensive investigation by outside counsel," Kelly said.

Last week, we accelerated the internal investigation after Southwest received details from the FAA's letter of civil penalty. On March 10, Kelly was given preliminary findings from the internal investigation.

"I am concerned with some of our findings as to our controls over procedures within our maintenance airworthiness directive and regulatory compliance processes," Kelly said. "I have insisted that we have the appropriate maintenance organizational and governance structure in place to ensure that the right decisions are being made."

Based on those findings, Southwest has:

Placed three employees on administrative leave. Those employees are cooperating with the investigation.

Hired a respected outside consultant with proven experience to help review its maintenance program controls, especially Airworthiness Directive (AD) compliance.

Fully engaged with the FAA on its current audit of Southwest and committed to FAA leadership that it will investigate and address any deficiencies in its maintenance controls.

"These are important and necessary steps," Kelly said.

During last night's review by Southwest of its maintenance records, the airline discovered an ambiguity related to required testing. Southwest made the decision to take a conservative approach and remove aircraft out of scheduled service. Southwest immediately began reinspecting those aircraft.

A total of 44 aircraft were affected -- one was already retired, five were in maintenance for scheduled checks, and the remaining 38 were removed from scheduled service.

Southwest's decision to remove aircraft from service resulted in approximately four percent of today's Southwest flights being canceled. Due to good weather conditions, the decision caused minimal schedule disruptions and the airline is running more than 90 percent ontime.

A portion of the aircraft have been inspected, cleared, and returned to service. The airline expects to have all of these aircraft inspected by early this evening. The ongoing internal review of Southwest's maintenance programs, policies, and procedures could potentially create other operational changes if the airline needs to swap or reroute aircraft as the internal investigation and audit unfolds.

"Again, we are mindful that during Southwest's 37-year proud history, we have safely transported the population of the United States -- every man, woman, and child -- four and a half times over. This is a fact. We have been a safe Company. I believe we are a safe Company. I am committed to making sure we become safer still," said Kelly.