It's located at the fat end of the egg. If you candle the eggs during incubation, you can see it slowly get bigger as the egg loses weight and the chicks grow. They internally pip into the aircell first and get their first breath. That's when you hear them cheep from the inside. Then they externally pip the shell and they will use the aircell as a guided to break out. I always draw the air cell with a pencil on day 7, 14, and finally at lockdown on day 18 so I can track if they have lost enough weight and to also make sure they are breaking out correctly.