OK, thanks Mohamad.
So to achieve the objective of checking PMP-2 duty >60 L/s, the model can be changed just be altering AV-1 "Treat Air Valve as Junction?" to TRUE, and checking the Profiles along both the small and large diameter pipes to make sure they hydraulically both make sense.
With these Flygt pump curves, note that AV-2 is effectively going to act like a rising main discharge manhole. Under almost all scenarios the pipes downstream of AV-2 will be gravity flow due to the mix of diameters used with air in the top of the pipe. Air handling issues aside (the real life system may need another air valve downstream near the hydraulic jump to allow any entrained air to escape)...........another possibility of modelling is to model the scenario with AV-2 as a Reservoir element instead to simulate the boundary of the pressure pipe network as the point at which it transitions to the gravity main. You can still keep the downstream elements for other hydraulic calculations, like Hammer model runs, but make them Inactive in the Topology for the WaterCAD steady-state scenario.