01 - Peel the onions and slice into 1/2-inch thick rings. Separate the rings and set aside.
02 - Combine flour, baking powder, paprika, garlic powder, salt, and black pepper in a shallow bowl.
03 - Whisk eggs and milk together in a separate bowl.
04 - Place panko breadcrumbs in a third shallow bowl.
05 - Dip each onion ring in flour mixture, then egg mixture, and finally coat with panko breadcrumbs, pressing lightly to adhere.
06 - Place breaded onion rings in a single layer in the air fryer basket, spray lightly with olive oil.
07 - Cook at 400°F for 10 to 12 minutes, flipping halfway through and spraying again with olive oil, until golden and crispy.
08 - Whisk together mayonnaise, sour cream, ketchup, Dijon mustard, lemon juice, smoked paprika, salt, and pepper until smooth, then adjust seasoning to taste.
09 - Serve hot onion rings immediately with the prepared dip.