There were rumors of Apple's impending release of a new 12" (11.88" to be precise) Macbook with Retina display in 2014, as early as October last year [MacRumors] and that too from a KGI Securities analyst, Ming Chi Kuo, who has been more accurate than not most of the times. There was a recent blog post on fpblog.net on this rumor with more juicy details on technical specs and possibilities as well. All this along with the fact that Macbook Airs are the only Apple laptops (other than the previous generation 13" Macbook Pro with a CD slot that Apple still sells) that do not have a Retina display, makes this rumor almost a no brainer.
However the above posts do seem to suggest that Apple will introduce this new 12" Retina Macbook Air (let's call it that for now) sometime in 2014 in addition to the current (recently updated to Haswell processor) 11" and 13" non-Retina Macbook Airs.
While this sounds reasonable, I think there is also another possible scenario. Consider this, right now, 13" Macbook Pro with Retina display is a very robust machine with all SSD memory, really thin (though not as thin as the Macbook Air) and with excellent battery life, thanks to the Intel's new processors (again not as good as the Macbook Air's greater than 12 hour battery life). So the 13" Macbook Pro with Retina display is almost as portable (in terms of battery life) as last year' Macbook Air, but slightly heavier with a much better display. It has become increasingly harder to distinguish these two models (13" Macbook Air and 13" Retina Macbook Pro), that are also priced very close to each other.
The 11" Macbook Air, while being an excellent portable machine, suffers from too small a screen size (except for a niche of customers) and very bad resolution and as far as I know, is not selling as much as the 13" one (look at all the deals the 11" Macbook Air gets - AppleInsider's 2013 near holiday post). So both the current models of Macbook Airs suffer from some constraint or the other and that is not Apple's way of making a product. Apple's products are perfect. So what if Apple decides to make the 12" Retina Macbook Air the only Air model? Too drastic a step? Might not be if you are Apple.
Say the above scenario does pan out to be true, then Apple's lineup of laptops would look like this, a 12" Retina Macbook Air (with extreme portability, not as much power - Broadwell processors and insane battery life), the 13" Retina Macbook Pro (with better processor, still portable) and the 15" Retina Macbook Pro (beast of a processor, less portable). This makes more sense if you are Apple. Again if this is going to happen right away with the 12" Air's introduction in 2014 or as the analysts have predicted, this is going to happen more gradually, no one can tell. But a 12" Macbook Air, that too with Retina display makes more sense than both the current 11" and the 13" Macbook Air models.