Stir flour, cornstarch, baking powder, and salt together in a small bowl. Dip onion rings into the flour mixture until coated; set aside.
Whisk milk and egg into the flour mixture using a fork. Dip the floured rings into the batter to coat. Place on a wire rack to drain until the batter stops dripping.
Place bread crumbs in a shallow dish. Place rings one at a time into the crumbs and scoop the crumbs over the rings to coat evenly. Give rings a hard tap as you remove them from the crumbs; the coating should cling very well. Repeat with remaining rings.
Heat an air fryer to 400 degrees F (200 degrees C) according to manufacturer's instructions. Place rings side by side in the frying basket. Spray lightly with cooking spray. Flip rings and place basket in the air fryer. Cook until rings are golden brown, 2 to 3 minutes. Flip once halfway through. Drain on paper towels and sprinkle with garlic powder and paprika.