Qantas Airways said on Friday that amidst the improving global environments, the aviation industry is still locked in a challenging situation which explains its commitment in to the two-airline approach that company said would provide more room for economic flexibility, market leverage and a solid cash flow.

Company chairman Leigh Clifford said that competition in Australia's commercial aviation industry would prove to be more stringent in both the international and domestic market.

Mr Clifford stressed that for Qantas to maintain its edge over rival airlines, the group's two flying brands, Qantas and Jetstar, would have to clash head on with their daily flights that would cover the country's various market segments.

Qantas chief executive Alan Joyce reiterated that Jetstar is aiming to be the best low-fare airline in the world and this goal could only be realised through "sustainable growth and being true to the positive and energetic values of the brand."

Mr Joyce said that Qantas' aggressive commitment for growth and improved offerings for the riding public were best exemplified by the introduction of technological breakthroughs on the airlines' inflight entertainment system such as the use of iPad on Jetstar flights.

He added that the budget airways is set to get the first 15 of 50 Boeing 787s orders forwarded by Qantas in 2012 for its international flights and would allow the transfer of A330-200s to Qantas and the subsequent early retirements of its B767-300s, effectively overhauling the two airlines' fleet of commercial aircrafts.

Qantas said that it has seen improved traffic and demand on its premium and leisure sectors in fiscal 2010, with the domestic sector registering marked improvements in the same period though Mr Clifford noted that the airways' local leisure demand posted weak figures by the latter part of the financial year.

He said that in preparation for the company's consolidation of higher capital requirements in order to keep its impressive credit rating, Qantas has decided to skip payment of dividends for 2009/10, as he reminded that "the economic outlook and competitive situation will continue to be challenging and potentially volatile."