iPad Air (5th gen) system using 35GB. How to reduce?

Regrettably, you may struggle with an iPad that has so little internal storage, in particular with iPadOS 26 that makes significant demands upon local storage. The 32/64GB iPad models are best suited for use in Educational settings, or retail/business environments where the ability to store local data on the device is not required.

Presumably you refer to your iPad’s System Data (a.k.a. “Other Data”) as viewed from iPad Storage:

Settings > General > iPad Storage > System Data

A simple shut-down/restart (or forced restart) of your iPad will clear volatile (i.e., temporary) cached data from your iPad:

Settings > General > Shut Down

Force restart iPad (models with Face ID or with Touch ID in the top button)

If your iPad doesn’t have the Home button, do the following:

1. Press and quickly release the volume button nearest to the top button.
2. Press and quickly release the volume button farthest from the top button.
3. Press and hold the top button.
4. When the Apple logo appears, release the top button.

Clearing Safari's cached website data may help to reduce System Data, but this will only offer temporary relief:

Settings > Apps > Safari > Clear History & Website Data

iPadOS 18/26 makes considerable use of local storage for caching frequently used data and system assets, such as Apple Intelligence - this being included within the reported System Data.

It is generally recommended that you maintain at least 4-6GB of free space at all times - as your iPad needs some temporary space to complete many tasks. When performing system software updates, you may temporarily require more...

A system software update requires sufficient space to be downloaded, unpacked and verified prior to installation - major version updates (such as updating from iPadOS 18.x to iPadOS 26) requiring considerably more space than an incremental point-update. The required space, to perform an OTA update, is typically double the stated space for the installed update; after the update is successfully completed, temporary files are automatically deleted - returning free space.

If your internal storage is full, or is insufficient for the task that you need to perform, your only option is to better manage the storage that you have - and delete unused Apps or unneeded data. 

These support pages should prove to be helpful:

About storage on your device and in iCloud – Apple Support

What's the difference between device storage and iCloud storage? – Apple Support

Manage your iCloud storage – Apple Support

How to check the storage on your iPhone, iPad and iPod touch – Apple Support

Clear Other storage on your iPhone or iPad - Apple Support

“Offloading” Apps can be a helpful method of creating temporary space for a software update:

https://9to5mac.com/2020/01/21/how-to-offload-apps-in-ios-to-save-space-without-deleting-their-data/

Additional information about creating sufficient space for installation of a software update can be found here:

If you need more space for an update on your iPhone, iPad, or iPod touch - Apple Support

External storage options can often help with managing limited internal storage. Depending upon your iPad model, the iPad will either have a Lightning or USB-C port - and may therefore require either an Adapter or USB hub to connect the USB Storage device. If your iPad has a Lightning port, you’ll need an Apple Lightning to USB3 Camera Adapter:

• Lightning to USB 3 Camera Adapter

https://store.apple.com/uk/xc/product/MK0W2ZM/A

lodo_piro wrote:

Thank you for the standard answer provided.

Unfortunatly it’s not helping me in reducing the unbelievable amount of space required by the system

There isn't a "standard answer". I have, however, attempted to provide available options - along with an explanation of causal factors. While Apple AI (this being a contributing factor) can be turned-off, you can't manually remove the associated software assets from your iPad.

At this juncture I stopped short of suggesting that you fully erase and reset the iPad - and then restore from an iCloud or iTunes backup. With that said, so doing would temporarily reduce system data to a minima.

How to back up your iPhone, iPad, and iPod touch - Apple Support

Erase all content and settings:

Settings > General > Transfer or Reset iPad > Erase All Content & Settings

After the reset restore the backup to your iPad:

Restore all content to iPad from a backup - Apple Support

You can turn off Apple Intelligence. As far reducing system and OS space requirements, that’s about it. Otherwise research space management options as described above, or buy a device with more capacity. Sorry that’s not the answer you want to hear, but that’s life.