Prepare the onions: Peel the onions and slice them into 1/2-inch rings. Separate the rings and discard the very small inner rings (or save for another use).
Set up your dredging station: In the first shallow bowl, combine flour, garlic powder, paprika, salt, and pepper. In the second bowl, whisk together eggs and milk. In the third bowl, mix panko and regular breadcrumbs (and parmesan if using).
Coat the onion rings: Working with one ring at a time, dredge in the flour mixture, then dip in the egg mixture, then coat with breadcrumbs. For extra crispiness, dip the coated ring back into the egg mixture and then breadcrumbs again.
Preheat your air fryer to 375°F (190°C) for 3 minutes.
Arrange in air fryer: Lightly spray the air fryer basket with cooking spray. Place onion rings in a single layer, making sure they don’t overlap. Lightly spray the tops of the rings with cooking spray.
Cook in batches: Air fry for 7-8 minutes, flipping halfway through, until golden brown and crispy. Work in batches to avoid overcrowding.
Keep warm: Place cooked rings on a baking sheet in a 200°F (95°C) oven while cooking remaining batches.
Serve immediately with your favorite dipping sauce like ketchup, ranch dressing, or spicy aioli.