Hi,
RotMG uses a "captive" install of AIR. This means that other than downloading from Steam, no other install is required. RotMG installation contains all of the components of AIR required to allow the game to run. Any update of AIR that you make to your system will not make any difference to this application.
If you can't launch the game, I'd try uninstalling and then reinstalling from Steam (or verifying the integrity of the game cache from within Steam's menus).
Thanks,
Chris