Preheat the air fryer to 400°F (200°C) for 5 minutes.
In a shallow bowl, combine the grated Parmesan cheese, panko breadcrumbs, garlic powder, paprika, dried Italian seasoning, salt, and black pepper. Mix well.
In another shallow bowl, whisk together the eggs and water until fully combined.
Dip each tilapia fillet into the egg mixture, allowing any excess to drip off.
Coat the fillets evenly with the Parmesan breadcrumb mixture, pressing gently to adhere the crust.
Lightly brush or spray both sides of each crusted fillet with olive oil to help crisp the coating.
Place the fillets in a single layer in the air fryer basket, making sure they do not overlap. You may need to cook in batches.
Air fry the tilapia fillets at 400°F (200°C) for 10 to 12 minutes, flipping halfway through, until the crust is golden brown and the fish flakes easily with a fork.
Carefully remove the fillets from the air fryer and serve immediately.