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This is a pretty standard new CEO move. Big impairment, net income goes way down, next few years look a lot better. Meanwhile cash flow doesn’t change.

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How does cash flow not change when you have to scrap the whole lot of 737Max orders?

I meant the impairment itself does not impact cash flow (setting aside taxes, can’t comment there). See Verizon Oath write down. Of course this can happen to already distressed firms who are experiencing cash flow issues. It’s just a way of making things appear “even worse” in your books without materially impacting your day to day business.

But the cash flow will definitely change. They are selling fewer planes in the near term.

That's exactly why the new CEO will push for a big impairment immediately. That way the very-terrible-bad results are attributed to the former execs. The new CEO is essentially resetting the baseline and can post growth from there.

If the 787 recovers eventually, it's a windfall and the new CEO looks like a hero for implementing revolutionary change.

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