The airlines industry in Indonesia has shown smooth but steady growth. Moreover, the Indonesian government has begun to target to focus more on tourism exploration and building air infrastructure to attract domestic and foreign tourists. Garuda Indonesia and AirAsia are the airlines currently operating and own quite big market share in Indonesia. The two airlines apply different strategies where one chooses differentiation and the other chooses cost leadership. This article will discuss how the two airlines have implemented their strategies to compete including responding to the conditions of the Covid-19 pandemic and how it affects their performance.