The 13-inch M5 Air can run two external displays while keeping its built-in screen active. On the M3 Air, using the second external display requires closing the lid. For a desk that needs all three screens at once, the M5 therefore changes what the laptop can do without sacrificing its own display. This is native display support within the specified resolution and refresh limits, rather than a promise about every dock.
Memory is the other concrete configuration difference. The M5 Air can be configured with up to 32 GB, compared with 24 GB on the M3. But the two configurations compared here each have 16 GB of memory and a 512 GB SSD. Replacing one with the other does not add memory or file space. If capacity is the reason to upgrade, the benefit comes from choosing enough of it, rather than simply choosing M5.
Both tested Airs are fanless and reduce CPU power during extended multicore loads. No matched application test for these exact configurations quantifies the speed gain from replacing one with the other. Memory and native display support therefore provide the clearer supported upgrade cases.
Keep an M3 Air that has sufficient capacity and handles your everyday applications well. Consider M5 when a higher-memory configuration or the two-external-plus-built-in display setup removes a recurring limitation, provided the actual replacement cost after any trade-in is acceptable.