Inside the brand new Qantas planes coming to Australia

Qantas has unveiled its brand new aircraft - a bigger, more fuel efficient model that has plenty of extra baggage space for passengers.

The aircraft, which is scheduled to arrive in Australia in June, will be the first of 28 A321XLR aircraft on firm order (with purchase right options for more) as part of the progressive replacement of the airline's Boeing 737s over the next decade.

It will initially operate on domestic flights, but experts say it will eventually open up more routes for the airline, with an extra fuel tank that means it can fly much further without stopping.

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"It's going to be transformative, and it will be a generational change for the Qantas narrow-body fleet in Australia," Qantas CEO Vanessa Hudson told 9News.

Qantas' A321XLR are also five metres longer than the outgoing 737s, and will seat 197 passengers (20 Business seats and 177 Economy seats).

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That is an increase of 13 per cent in total seat capacity with no reduction in space between seats and a 66 per cent increase in premium seats.

The aircraft can fly approximately 3,000km further than the 737 (at 8,700km), creating the chance for new Qantas routes direct to international destinations such as South East Asia and Pacific islands.

"It will be a gamechanger in terms of the ability for airlines to open new long haul routes for their passengers," Airbus engineer Joost Van Der Heijden said.

While leg room is similar to the 737, every passenger will also get their own bin as well as a 50 per cent increase in overhead baggage space.

"These are new bins, and for every single customer they have a bin and bag spot overhead," Hudson added.

Qantas customers will be the first in the Asia Pacific to experience the Airbus A321XLR, as manufacturers in Germany work through a backlog of 8000 orders that will take 10 years to fulfill.

While the first plane will be ready to fly in June, there are already two more under production, with Qantas set to have 7 of the new model by June next year.