To be quite honest, I don't exactly think Cape Air is too concerned about whether or not changing pay would retain pilots. As you said, they do have an excellent attitude about people coming and going, but they counter that by viewing the bottom half of the seniority list as transient employees. Can't really blame them though; who is interested in making a career out of flying a 402 for $15-20/hr while living in constantly changing outstations?

That being said, I do wonder how they will attract enough pilots to fill the spaces that are going to be opening. With the regionals' mins plummeting, why would a recent grad with $100,000 of debt choose 16,500/yr for SIC piston time? Especially when interns are getting a better deal than full-time FOs...

I think Cape Air is an excellent stepping stone, and I am enjoying working here (minus the locale). But it will be interesting what happens when the pilots run out.