We often tell people that most "pump problems" aren't really problems with the pump, but rather with the system. Air entrainment is an excellent example of a system problem. When water from an elevated outfall (like a gravity sewer line several feet above the water line) splashes into the wetwell, it captures lots of air bubbles and mixes them, often to several feet of depth inside the wetwell. Mechanical aerators depend on exactly this kind of entrainment action to help aerate lagoons -- but in a wetwell, it's a common cause of headaches.
Air entrainment looks like this in action:
While some people might think that submersible pumps would be immune to the problem of air entrainment, they're quite wrong -- submersible pumps can become air-bound just like self-priming pumps. Air entrainment can be solved in a number of ways, including by the use of baffles or plates, and by raising the surface water elevation so that the water has less distance to fall -- and has greater distance from the pump's suction inlet. Air entrainment can also be addressed by the use of directional flanges on the suction line.