Restore MacBook Air to factory setting

You need to go to recovery, use disk utilities to erase the drive then start the reinstall OS. When it gets to the screen to pick your country you shut it down. There are some other things that you should do.

https://support.apple.com/en-us/HT201065

The best way is to reset to factory settings, trust me is more than just doing a factory reset.

Step 1 Create a backup

https://support.apple.com/mac-backup

Step 2

Sign out of iTunes in macOS Mojave or earlier

Step 3

Sign out of iCloud

If you're using macOS Catalina or later, choose Apple menu  > System Preferences, then click Apple ID. Select Overview in the sidebar, then click Sign Out.

If you're using macOS Mojave or earlier, choose Apple menu  > System Preferences, click iCloud, then click Sign Out.

Step 4 (This is where I come in with my personal experience, before was just from this)

Find your factory MacOS System from this website

https://support.apple.com/en-au/HT201686

Step 5 Download the Base Version of that system

https://support.apple.com/en-au/HT211683

Step 6 Create a Bootable Drive

https://support.apple.com/en-us/HT201372

Step 7 Reinstall MacOS

So to do this first say goodbye to your MacBook and then Shutdown.

Plug in your bootable usb you created in Step 6.

1. With your Mac or Mac with Apple silicon turned off: 

• • On a Mac: Press and hold the Option key as you start up your Mac.
• On a Mac with Apple silicon: Press and hold the power button until you see “Loading startup options.”
  • If you’re using a Mac Mini, wait for the system indicator light to turn amber.

1. When you see the available startup disks, select your bootable disk using arrow keys (usually orange and labelled "Install MacOS "[Your MacOS Version], then click the Up arrow (on Mac) or Continue button (on Mac with Apple silicon.) or return key.

This will take some time

Then from disk utility, click on View at the top and Show all Devices

Then click Erase

Call it your bootable drive system eg: MacOS Catalina (that's mine)

• Format: Continue to use APFS or Mac OS Extended (Journaled), as recommended by Disk Utility.

And leave it as GUID Partition Map

This will also take time

Them Quit Disk Utility (Command + Q)

Step 8

Then Install macOS on your main Drive from the first screen you saw when booting from your bootable usb.

Edit:

Thats it. If you want after its done and it restarts automatically, shut it down and unplug the usb, then turn it on again to verify it can boot without it. Sorry to see your MacBook go and hope this help. On my MacBook Pro 2017 the WHOLE Process took 3-4 hours (but that also included my setup of the "new" Macbook) and on my MacBook Pro 2010 The preparation took 4 hours (Steps 1-7) , Installation took overnight (that was Step 8) (might've been completed halfway through the night though)(I left installation for overnight cos that takes the longest).