Qantas has locked in a reinvention of its domestic fleet, securing orders with Airbus for its popular A320neo family – including the extended-range A321XLR – which will replace the Boeing 737 fleet currently plying its domestic and short-range international network.

In line with the confirmation of its 'Project Sunrise' A350 ultra-long-range aircraft order, the airline has confirmed the first aircraft in its domestic and short-range fleet renewal will enter service from late 2023, beginning the phase-out process for the older members of the Boeing fleet.

Qantas says its new short-range fleet will allow it to open a wider range of domestic routes and introduce new short-range international services to new cities in Asia and the Pacific islands.

Airbus edged out Boeing and its 737 MAX in what Qantas termed ‘Project Winton’ – named after the airline’s 1920 birthplace in central Queensland – which will redefine its fleet for decades to come.

Also on the way out are the ageing Boeing 717s flown by the regional QantasLink service – they’ll be upgraded to the Airbus A220.

Both new aircraft models will be up to 50% quieter than its retiring predecessors, with fuel burn up to 28% less per passenger.

In announcing the deal, Qantas Group CEO Alan Joyce described it as "a generation decision on what aircraft will serve our domestic passengers for the next 20 years."

"“The A320s and A220s will become the backbone of our domestic fleet for the next 20 years, helping to keep this country moving. Their range and economics will make new direct routes possible, including serving regional cities better."

Qantas' initial order will start at 20 A321XLRs and 20 A220s with purchase orders for another 94 now signed and sealed.

Subsequent deliveries from an additional 94 purchase right options, along with the total spend, will be spread "over a 10-plus year delivery window" as the Boeing 737s and 717s are gradually phased out.

The first 40 Airbus jets carry a combined list price of at least $6.5 billion before the typical 30-50% discount enjoyed by airlines.

This sees the total order for as many as 134 single-aisle jets top a staggering $20 billion – and while discounting could have slashed that to $10 billion, it remains a staggering sum for almost any airline at almost any time.

However, Qantas says that this is the perfect time to go shopping for new aircraft due to soft demand from airlines, and to reinvest in its future with an eye towards driving massive improvements in cost and overall efficiency, including reduced fuel burn and lower emissions.

"This is a long-term renewal plan with deliveries and payments spread over the next decade and beyond, but the similarly long lead time for aircraft orders means we need to make these decisions now," said Qantas Group CEO Alan Joyce.

"Qantas is in a position to make these commitments because of the way we've navigated through the pandemic, which is a credit to the whole organisation."

"This is a clear sign of our confidence in the future and we've locked in pricing just ahead of what's likely to be a big uptick in demand for next-generation narrow-body aircraft."

Settling on an all-Airbus domestic fleet gives Qantas added flexibility for flying different types of aircraft on different routes, Joyce says.

"The combination of small, medium and large jets and the different range and economics they each bring means we can have the right aircraft on the right route."

"For customers, that means having more departures throughout the day on a smaller aircraft, or extra capacity at peak times with a larger aircraft, or the ability to start a new regional route because the economics of the aircraft make it possible."

Qantas can also switch up its orders over the ten-year deal, opting for variants within the A220 and A320neo families "depending on our changing needs in the years ahead," Joyce added.

The Qantas order will also be combined with Jetstar's existing A320neo-family orders, and the Qantas Group’s existing deal for up to 36 A321XLRs, resulting in a total order book of almost 300 jets which can be divided between the airlines as needed.

And as you'd expect, Airbus is pretty chuffed with the result of what its Chief Commercial Officer Christian Scherer described as "an especially exciting campaign that has pushed the boundaries of technical, operational and financial evaluation, with in addition, a specific focus on sustainability."

"With the combination of the A220 and A320neo families Qantas is charting a course to operate one of the most modern, sustainable and fuel efficient fleets in the world... while offering its passengers the highest levels of aircraft cabin comfort in both the domestic and regional market segments."

While champagne corks will be popping at Airbus’ headquarters in Toulouse, it’s Qantas passengers who will be the real winners.

The new A321XLR will be five metres longer than the outgoing 737 and will be configured to seat 200 passengers, of whom 20 will be in business class.

Noticeably quieter than the Boeing 737, the near-vertical interior walls and modern ‘Airspace’ interior cabin design will make Qantas' domestic services feel far more spacious.

Roomy overhead bins can stow not only more bags but larger ones, in a welcome nod to travel trends.

In short: think of the A320neos as pint-sized versions of the twin-aisle A350, right down the LED mood lighting.

And while most people don’t know if they’re flying on an Airbus or Boeing jet, the A320neos will also give Qantas a greater chance to differentiate itself from Virgin Australia, which will begin flying the Boeing 737 MAX from the middle of 2023.

Joyce says the airline has "some exciting plans for the next-generation cabins we'll put on these aircraft, which will offer improvements for passengers that we’ll share in coming months."

The long-legged A321XLR and A321neo can carry between 180-220 passengers in a standard two-class configuration, as opposed to the 174 seats of the current Boeing 737; the smaller A320neo brings this back to 150-180 seats.

Airlines flying A320neo-series jets have rolled out everything from conventional business class seats to the fixed-shell deep recliners of Cathay Pacific's A321neo...

...  to the lie-flat beds of JetBlue's A321LR Mint Suites, which also boast a sliding privacy door...

... and see the two front-row suites upgraded to an even more spacious and better-appointed Mint Studio.

Read more: JetBlue's game-changing A321LR business class

Seats like that could be a must-have for any Qantas A321LRs and A321XLRs, especially with their ability to reach into Asia – all the way up to Tokyo, in fact – well beyond the scope of their domestic brief.

This could open up non-stop flights to and even between smaller cities which couldn't justify larger twin-aisle jets such as the Airbus A330 or Boeing 787, and which would otherwise require a stopover.

“That changes the economics of lots of potential routes into Asia to make them not just physically possible but financially attractive," Joyce remarked after inking the initial A321XLR order in 2019.

These direct 'thin' routes would prove a value time- and hassle-saver for business traveller, although passenger comfort will come to the fore on these eight-to-nine hour treks.

Qantas will also trade up from its 20 ageing Boeing 717 jets with an average age of some 20 years to the Airbus A220 series.

Larger than the outgoing aircraft, Qantas has ordered this model configured to seat 137 passengers, of which 10 will be in business class. This marks an uptick of 25% in overall onboard head count with what the airline says will be no reduction in space between seats.

Among the dozen international airlines already flying the A220 are Air Canada, Delta, JetBlue and Swiss.

As with the larger A320neo family, the A220 is quieter and far more modern inside.

The overhead bins can accommodate one roller bag for every passenger – an established sore point on the Boeing 717.

Business class in the Airbus A220 is arranged in a 2-2 manner, with the premium seats at 21 inches wide – a smidge more than on the Boeing 717.

And the possibilities for Qantas' A220 business class are wide open, especially as the airline says these nimble jets could end up darting between capital cities.

By way of example, here's what US carrier Breeze – created by JetBlue founder David Neeleman – selected for the pointy end of its A220s.

In economy, the A220 adopts an interesting layout of three seats on one side of the aisle and two on the other.

Yes, there’s a dreaded middle seat – but Airbus says the A220 can be configured with that middle seat at a slightly wider 19 inches across, compared to 18 inches (the same as the Boeing 717) for window and aisle seats.

Also read: What's it like to fly on an Airbus A220?

Qantas says it also holds purchase rights for the smaller A220-100, capable of seating 100-120 passengers – around the same amount as the Boeing 717 – in a two-class layout, giving it "a fleet mix that can deliver better network choices and route economics."

"The small and medium size A220s provide the Group with flexibility to deploy these aircraft throughout most of its domestic and regional operations," Qantas elaborates.

"They could be used during off peak times between major cities and on key regional routes to increase frequency."

Additional reporting by Bloomberg