Video converter

VLC can. Open it up, select File - Convert/Save, select a source, click convert, click the tool icon next to the output and you can manually select AVI and the compression format, etc.

Which to choose depends on your usecase. Both MKV- and AVI-files are just containers that can contain many different video and audio formats. What can be played depends on the capabilities of your desired device.
Just an example: MKV-files often use H.264 (or H265 lately) encoded video-tracks and mp3, acc or ac3 audio. Apple iTunes does not accept MKV-files anymore regardless of the encoding. MP4-files containing the same tracks should be no problem.
In such a case you need to switch the container from MKV to MP4 but don't need to recompress. A good and simple tool for that could be AVIDemux, because it can simply copy tracks from MKV to AVI or MP4 without a new encoding (very fast). If you need a special video-/audio-format, you may have to do a complete recompression (slow). There are a some tools for that with different level of complexity or control. I prefer Handbrake for that (there is an actively maintained .Net Development Test version here), but that's just my own favorite with a good balance of control if needed and good presets.
There are others, in the official app library (VLC as John wrote - easy, when you find the options, they are kind of hidden somtimes or TEncoder - a rather old but familiar UI, uses ffmpeg, so should produce good results with the right settings)