We are definitely getting a second Air IMO. For the Air to survive, Apple needs to add to it. Second camera and a second speaker at a minimum. There is no way the same Air with an updated screen and/or chip is going to make a difference with respect to sales.I just don't know what Apple was thinking with the Air, it was clear it would bomb based solely on them charging more for a device with less battery, cameras and speakers than a regular iPhone. Bizarre marketing decision and the only thing I can think of is it was a way to begin getting a return for the R&D for parts developed for the Fold.
My prediction is the Air is dead, it will not see a second model.
What you will see is a discount in September to start shifting some of the existing stock and the early 2027, you'll see an Air 'inspired' regular iPhone 18 (think plateau but thicker and with 2 cameras and speakers) replace both the 17 and the Air, and this experiment will be quietly forgotten about. The iPhone E will then essentially be what was the iPhone 17.
It will also be the end of the larger non Pro model. The future iPhone line up will be:
iPhone E - iPhone (regular) - iPhone Pro - iPhone Pro Max - iPhone Fold
I truly believe the Air could potentially replace the standard iPhone one day if Apple can simply add to it and get the price closer to $800 (like $900, for example).
I definitely don't think the 18 is going to get the changes you speak of.