If your air fryer requires preheating, preheat to 370°F (175°C).
Slice the chicken breast horizontally to make two even cutlets; if pieces are uneven, place between plastic wrap and pound to even thickness.
Arrange three shallow dishes: mix 1/4 cup flour with 1/2 teaspoon kosher salt and 1/2 teaspoon garlic powder in the first; whisk 1 egg with 2 tablespoons water and a pinch of salt in the second; combine 1/3 cup panko, 1/3 cup grated Parmesan, 1/2 teaspoon garlic powder, 1/2 teaspoon oregano, and 1/4 teaspoon crushed red pepper flakes (optional) in the third.
Dredge each chicken piece in the flour mixture, shaking off excess, then dip in the egg wash and finally press into the breadcrumb mixture to coat evenly.
Place breaded chicken on a plate and spray the top with cooking spray; place chicken sprayed-side down in the air fryer basket or tray and spray the other side.
Air fry at 370°F (175°C) for 6 minutes. Carefully flip the chicken and air fry for another 4 minutes.
Remove the basket, top each piece with about 2 tablespoons tomato sauce and a slice (or 1/4 cup shredded) mozzarella.
Return to the air fryer and cook 2–3 minutes more, until the cheese melts and the chicken reaches 165°F (74°C) internally.
Serve immediately.