MacBook Air replacement or only repair?

"Brand new" usually means that you're still in the return period. In that case you would return the device to Apple and get a different one. After the 14 days, any repairs would fall under the warranty. And Apple may, at its discretion, repair or replace the computer. You don't have a say.

WHAT WILL APPLE DO IN THE EVENT THE WARRANTY IS BREACHED?

If during the Warranty Period you submit a claim to Apple or an AASP in accordance with this warranty, Apple will, at its option:

(i) repair the Apple Product using new or previously used Apple genuine parts that have been tested and passed Apple functional requirements,

(ii) replace the Apple Product with a replacement product of the same model (or with your consent a product that has the same or substantially similar features as the original product – e.g., a different model with the same features, or the same model in a different color) that is new or comprised of new and/or previously used Apple genuine parts and has been tested and passed Apple functional requirements, or 

(iii) exchange the Apple Product for a refund of your purchase price.

Legal - Mac Warranty Us - Apple

Only If your Mac can't be repaired, Apple will replace it under the terms of AppleCare agreement.

As long as they can replace the damaged parts you will not have a replacement.

While I do believe Legendarioid is correct for most cases, one way around this would be to refuse repair and return it if they will allow you to and if it is within the return window still. That is if you prefer to just get another new device.