Preheat the air fryer to 380°F (193°C) for 3 to 5 minutes.
Pat the chicken breasts dry with paper towels. If they are thick, pound them to an even thickness.
In one shallow bowl, whisk together the egg and milk.
In another bowl, combine the panko breadcrumbs, Parmesan cheese, Italian seasoning, garlic powder, onion powder, paprika, salt, and black pepper.
Brush the chicken breasts lightly with olive oil.
Dip each chicken breast into the egg mixture, then coat thoroughly in the Parmesan breadcrumb mixture, pressing gently so the coating sticks.
Lightly spray both sides of the coated chicken with cooking spray.
Place the chicken breasts in the air fryer basket in a single layer, leaving space between each piece.
Air fry for 10 minutes, then carefully flip the chicken and lightly spray the top with cooking spray.
Continue cooking for 8 to 10 minutes, or until the coating is crispy and the chicken reaches an internal temperature of 165°F (74°C).
Let the chicken rest for 5 minutes before serving.
Garnish with fresh parsley and serve with lemon wedges if desired.