AIR for IOS default setting for a new project is set at 960 x 640. Should not it be 960 x 540 ?

use whatever stage size you want, but there is no useful "average iphone dimension"  and if there were it would not include ipad resolutions which is also relevant to ios apps.

generally, you would match the greatest screen resolution you want to target and then resize the stage for other resolutions.

https://developer.apple.com/library/archive/documentation/DeviceInformation/Reference/iOSDeviceCompatibility/Displays/Displays.html

A 1x iPhone size is 480x320 (when in landscape). A Retina iPhone would be 960x640. Although all iPhones since iPhone 5 have not been that ratio, that is still the starting point.

Have you decided how you are going to handle the range of aspect ratios? iPad is 4:3, which could be 960x720 for example, and iPhone 11 is 19.5:9, with 960x443 being an example. You are going to need to find an approach that works for the full range of ratios, and which one you start from may not matter very much.