You need 4 shallow bowls or deep plates. In the first one combine flour, paprika, and ½ tsp salt. In the second combine buttermilk (or milk and vinegar/lemon juice) and egg, then add ¼ cup of the flour mixture from the first bowl. In the third combine panko breadcrumbs, ½ tsp salt and olive oil with a fork, until the oil is evenly distributed. Put half of the panko in a fourth bowl so you can switch to the second part after the first got sticky.
Pat dry the onion rings with paper towels to remove excessive moisture. Using a fork, dredge the onion rings in the flour mixture, drop them in the buttermilk mixture and then dredge them in the panko mixture. (TIP: Freeze the breaded onion rings for 15 minutes on a baking sheet, this helps the panko mixture to stick better.)
Spray Air Fryer Basket with oil spray. Place onion rings in a single layer in the Air Fryer basket. You can place smaller rings inside bigger rings if necessary, just make sure there is space between them.
Cook at 400°F until golden brown and crispy, about 11-15 minutes. Spray with some cooking spray after about 6 minutes. You don't need to turn the onion rings.
Carefully lift out the onion rings with a cookie spatula or fork and serve.