Why is my iPad Air showing that it is up to date in iOS 12.4.8 when there is iOS 14?

The first generation iPad Air, iPad mini2 and mini3 can only be updated to iOS 12.4.8.

Apple ended update support for these devices in September 2019. They cannot be updated to iPadOS 13 (or any later major versions of iPadOS) as the internal hardware does not meet the minimum technical requirements for new versions of iOS/iPadOS.

Some App developers have dropped support for iOS versions preceding iOS 13.x for technical reasons (often because APIs or software libraries upon which they rely have been updated in the new version of iPadOS, making their App incompatible with earlier versions). 

Whilst many App titles remain compatible with your iPad, if you want or need to access to Apps requiring the most recent versions of iOS, you’ll need to consider replacement of your iPad with a newer or current model that supports iPadOS13/14.

I hope this information provides helpful clarity as to your available options - and the limitations of your existing iPad.

Because your iPad is up to date.

You can't update to iPadOS 14 on an iPad Air (First Gen).