It is obtained through
- Battles and Level Taxes on most of The Tundra, plus the final and bonus scenarios of the Grasslands
- Supply Station
- Prison (at random when you capture a prisoner)
- Daily Grind Rewards
- Daily Login Reward (random, with a couple of 2)
It is used to upgrade magic skills on the Magic Ward from level 11 until level 41. There are two areas in the Tundra that do not have the potential to provide Air Essence, Storm Hold and Frost Plains.
It can be Synthesized into Pure Air Essence at the Forge. You need to level up a magic skill of any kind to level 41 before you're able to do this. After all your magic skills are at level 41 or more, this is the only use left for this item.
The max stack of Air Essences is 9999.