Despite the recent accumulation of theoretical and empirical studies on avian influenza viruses (AIVs), the interactions among the diverse pool of strains remain poorly understood. One potential reason is multiple transmission routes. In this paper, we explore the behavior of a two-strain mathematical model of AIV dynamics with lifelong immunity to understand how the combination of direct and environmental transmission (via a persistent viral reservoir) determines strains coexistence and dominance. We find that coexistence requires the magnitude of basic reproductive ratios of the strains to be identical for each transmission route (R(0)(dir) and R(0)(env)) when cross-immunity is assumed to be perfect. Coexistence may be also possible when one strain is only directly transmitted and the contribution by environmental transmission is high. When we relax this assumption, the level of cross-protection does not modify coexistence criteria when strains are mainly environmentally transmitted, in contrast to the case where direct transmission dominates. Finally, when competitive exclusion is observed, the strain with the largest contribution from direct transmission outcompetes the other through competition for viral particle acquisition. Overall, we conclude that environmental transmission can affect the patterns of coexistence predicted by direct transmission models in complex ways.