midair is correct.
the use of "-" mostly is unneccessary
(a frequently and popular german mistake)

Most dictionaries list it as "midair". A few others list it as "mid-air", and none I could find list "mid air".

J.K. rowling changed her "midair" into "mid-air" throughout the new Harry Potter book. She seems to be allowed to do that

The Bugtracker Bugzilla uses the error message "Mid-air collision detected!".
I'm pretty sure that is not a mistake only made by germans. ;-)

I wouldn't blame that on Germans, either! I don't think most native English speakers would know whether midair or mid-air was correct.

Although I agree with daniel jackson that German-speakers often have a tendency to use hyphens where none is required in English, I disagree with him on this occasion. BE would use mid-air. AE has more of a tendency to write certain phrases in one word where BE would not, so I would not be surprised to see midair in AE, but believe mid-air would be the normal BE.

Also, bei den BBC News fand ich folgenden Artikel "Afghan mid-air crash kills four " (http://news.bbc.co.uk/2/hi/south_asia/8325362.stm).