Add the flour, 1 teaspoon salt, and pepper to a shallow dish and stir with a fork to combine.
Add the egg and water to a second shallow dish and stir well with a fork until smooth.
Add the panko, onion powder, garlic powder, paprika, and remaining salt to a third dish and stir to combine.
Spritz or brush the basket of the air fryer with oil.
Dip each onion ring first into the flour, then the egg, then the panko, making sure that the onion is fully coated in each.
Arrange onion rings in a single layer in the air fryer basket. If you have a rack, place the rack in the air fryer to make a second layer of onion rings. Spritz onion rings with oil.
Air fry at 380 degrees for 10 minutes, flipping halfway through cooking.
Notes
We've found that one large onion will easily serve 4 of us as a small appetizer or 2 of us for a good sized snack. If working in batches or doubling the recipe, keep the onion rings warm in a 200 degree oven on a baking sheet while finishing the remaining batches.