01 - Slice onions into ½-inch thick rings and carefully separate individual rings.
02 - Combine all-purpose flour, garlic powder, smoked paprika, salt, and black pepper in a shallow bowl.
03 - Whisk eggs and milk together in a second shallow bowl until fully incorporated.
04 - Place panko breadcrumbs in a third shallow bowl.
05 - Dip each onion ring in the flour mixture, coating completely. Transfer to egg wash, allowing excess to drip off, then press firmly into panko to adhere.
06 - Place breaded onion rings in a single layer in the air fryer basket. Lightly mist with cooking spray.
07 - Cook at 400°F for 10–12 minutes, flipping rings halfway through cooking time. Work in batches if necessary to avoid overcrowding.
08 - Whisk together mayonnaise, ketchup, Dijon mustard, lemon juice, smoked paprika, salt, and pepper until smooth and creamy.
09 - Serve onion rings immediately while hot and crispy, accompanied by the dipping sauce.