The most tricky part for a start is to achieve the connection to server. For this three items need to be specified in Airio connection file, usually Airio.con.1.txt which is for server #1. The items are LFS server IP address, LFS server Inim port (not game port!) and the LFS server admin password.
IP address needs to be in the XXX.XXX.XXX.XXX format. If Airio is connected locally (on the same PC where LFS server also runs), general local address 127.0.0.1 may be used. This local run is in fact the preferred mode of operation. You can get the IP address from the server provider otherwise.
InSim port is set using /insim=XXXXX command on the LFS server, usually in setup.cfg server file. LFS provider may require using specific insim port which you cannot change. Otherwise you may choose your own, usually 29999 is used. (Note that you cannot set server insim port through client, this is possible only from server console or server config file.)
The admin password is set on server using /admin=sometext, again in server configuration file, which is setup.cfg by default.
When the three items match in server setup and Airio setup, connection is guaranteed... Uhm... The error you mention is interesting, but showing AIRIO ERROR lines from Airio log.txt file would be much more helpful.