01 - Peel and slice the onions into 1/2-inch thick rings, separating the individual rings carefully.
02 - Combine the all-purpose flour, baking powder, paprika, garlic powder, salt, and black pepper in a shallow bowl.
03 - In a separate bowl, whisk together the eggs and milk until fully blended.
04 - Place the panko breadcrumbs into a third shallow bowl for coating.
05 - Dip each onion ring first into the flour mixture, then the egg wash, and finally coat thoroughly with panko breadcrumbs, pressing lightly to adhere.
06 - Place the breaded onion rings in a single layer in the air fryer basket and spray lightly with olive oil.
07 - Cook at 400°F for 10 to 12 minutes, flipping the rings halfway through and spraying again with olive oil, until golden brown and crispy.
08 - Whisk together mayonnaise, sour cream, ketchup, Dijon mustard, lemon juice, smoked paprika, salt, and pepper in a small bowl until smooth. Adjust seasoning as desired.
09 - Serve the hot, crispy onion rings immediately with the prepared dipping sauce.