How can I open and modify the .Air file?

used to open them with adobe air but this stopped working.

I've never used it but they say aired is the one to use..  https://www.aero.sors.fr/fsairfile.html

Also found this file in the Library..aired152_update806.zip

If one is editing more than just a few AIR files, the payware AirWrench is a better option. Keep in mind though, that aircraft dynamics settings are split between the aircraft.cfg file and the AIR file. Messing around with the AIR file can lead to very unpredictable behavior.

I've used aired, but as far as I know there is no proper documentation anywhere for the air file.

There's a few threads on the fsdeveloper.com forums, where people have decoded parts of the AIR file format. This about all LM says about AIR files in the P3d4 SDK documentation:

http://www.prepar3d.com/SDKv2/LearningCenter/simobjects/flight_models.html

Here's another website that you may find helpful:

http://mudpond.org/