I have a similar plan. Just sold my 11" Macbook Air to buy the 10.5" iPad.
It all depends on your usage scenario. The 11" Macbook Air is (was) an awesome laptop. After Haswell, its battery life and size basically made me forget it's a laptop, and at that time for me, it's a better solution than a 9.7" iPad 4 that I had. In real-life productivity, the 11" screen and 784p resolution unfortunately is quite cramped for a desktop environment. On its own, trying to be super productive on it can be frustrating sometime. On the bright side, once you connect it to an external display, it is just as productive and great performing as any regular laptop.
So, if you will be using your Macbook Air mainly in a desktop environment (especially with an external monitor), keep it, or if you really like the form factor, get a "newer" refurbished models. Anything after Haswell has awesome battery life.
So why I sold mine? Recently, I surprised myself how productive I can be even on my iPad mini 2 (no side by side, just slide over, and even then that improves productivity). Considering my 11" Macbook Air was more of on-the-go "laptop," and the kind of things I do on it can be replicated on an iPad, I think I can be as productive on a 10.5" iPad. Add iOS11, and the iPad wins me over. The 11" Macbook Air doesn't have SD card slot, so either way I have to carry a dongle. I rarely use USB flash drives anymore thanks to Google Drive. Add on to that that Apple is selling an iPad with as much storage as my Macbook Air (256GB), I don't mind living on the bleeding edge of post-pc era.
In short, depends on what you use the device for, and what other devices you already have. If this is your only laptop, then by all means either keep it or get another laptop/Macbook. A laptop is still crucial as a primary device. However, if this is your secondary laptop, I see an iPad can be a good alternative.