On the one hand it makes sense, and there are times of the year when one or two weekly flights run with the A321, however, LX has a great reputation among business travelers in TLV because of their A333/A343/B77W product, compared to LH, OS, etc who are flying A320 with European style business.
Last week I flew with LH from Munich to TLV and was one of 5 pax in the business section. Meanwhile on LX I have never seen a business cabin less than 70% full on A333/A343.
If they are switching from a consistent bed product to a variable product, the pax will go elsewhere because the unique advantage of LX has gone..