Stir flour, cornstarch, baking powder, and salt together in a small bowl. Dip onion rings into the flour mixture until coated, then place onto a plate.
Stir milk and egg into the remaining flour mixture using a fork. Dip the floured rings into the batter to coat. Place onto a wire rack until the batter stops dripping.
Place bread crumbs into a shallow dish. Place rings, one at a time, into bread crumbs, scooping crumbs over the top until evenly coated. Give rings a hard tap as you remove them from the crumbs; the coating should cling very well.
Heat an air fryer to 400 degrees F (200 degrees C) according to the manufacturer's instructions. Place rings into the air fryer basket so they are side-by-side without overlapping; spray lightly with cooking spray, then flip rings.
Place the basket into the air fryer and cook until rings are golden brown, 2 to 3 minutes, flipping once halfway through. Drain on paper towels and sprinkle with garlic powder and paprika.