Air injection into groundwater (air sparging) in a homogeneous axially symmetric porous medium is modeled using a two-phase flow approach. A numerical method based on the mixed form of the Richards equation for both phases is presented. Furthermore two analytical approximations are discussed to explain the numerical results. One is a one-dimensional description explaining the occurrence of small air saturations. The other is a closed form approximation for the distribution of the air saturation in the resulting steady state. From the latter we can estimate the maximum radius of influence of air sparging, as a function of the physical parameters. The analytical approximation at steady state and the numerical results are in good agreement.