Place potato and onion in a colander and use clean hands to squeeze out excess liquid. Transfer to a large bowl.
Add cheddar and flour. Season. Toss to combine. Use a spatula to fold egg through mixture until combined.
Lightly spray an air fryer basket with oil. In batches, place ¼ cupfuls of the mixture in the basket, 2cm apart (see tips). Gently spread to create 8cm circles. Spray with oil. Cook at 190°C for 10 minutes or until golden brown. Use an egg lifter to transfer to a wire rack. Repeat with the remaining potato mixture.
Serve pancakes warm (see tips) with yoghurt or sour cream.
