Former employees of the now bankrupt Jetsgo picked up their final paycheques Monday, unsure of where they will find their next jobs.

More than 1,350 former workers lined up in the morning outside Jetsgo's offices in Montreal and Toronto. In return for turning in their parking passes, pagers and uniforms, they are receiving payment up until Friday, the day the airline collapsed.

The workers are also getting their 2004 and 2005 vacation pay and outstanding per diems. But their Christmas bonuses of two tickets to fly anywhere in Canada or the U.S. are now worthless.

All banks have announced that they're holding the paycheques for three to five days to see if they clear.

And some former workers in Montreal and Toronto received a scare Monday morning when banks refused to cash their cheques.

"(The cheque's) no good," former Jetsgo ramp worker Shan Sanichara told CTV Toronto after trying to cash his paycheque at the National Bank of Canada. "They said they froze the account."

Former flight attendant Natalie Wheber was told by the Bank of Montreal that it's unlikely she'll receive her money because her cheque is likely to come back as insufficient funds.

But later in the day, these former employees received some good news when the court-appointed monitor for Jetsgo announced that cheques will, in fact, be honoured.

RSM Richter Inc. said Jetsgo had "administrative problems" with its bank Monday morning. In a statement, the accounting firm announced:

"We have now been advised that all problems have been sorted out and that checks will clear the bank."

Jetsgo's bank, the National Bank of Canada, told CTV News that there is enough money in the company's account to pay former employees, but will not say exactly how much is there.

Former Jetsgo station attendant Troy Nelson and his wife worked at the airline and says his family is now without an income.

"I don't know where to go now. I don't have any prospects in mind. Just like everybody else, we have a lot of responsibilities to do, but we have no jobs to take care of them," he told Canada AM Monday.

Nelson says he, like other former employees, woke up Friday and were stunned to learn their jobs no longer existed.

"We were told everything was going to be fine by some of the VPs a couple of weeks ago. They said everything we heard was rumors and the company was doing great."

Pilots out tens of thousands

Many former Jetsgo pilots are wondering what will happen to the $30,000 they were required to pay to the airline before they were hired.

The money was designed as a loyalty bond and went toward training. Jetsgo ensured its pilots they'd get their money back over two years with interest, if they stayed the full two years.

Pilots recently hired say they don't know when they'll see their refund.

"The money just went into the Jetsgo bank account and was used for current operations," airline analyst Joseph D'Cruz told CTV.ca.

"This isn't an insurance bond the way you'd think about it. It was a training fee," he added.

Asked if there's any recourse available to the pilots to recoup the money, D'Cruz replied, "None whatsoever."

Airline had been running on fumes

Some pilots are saying they wouldn't have joined the airline if they had known about the airline's precarious finances.

In fact, Jetsgo had not been doing well for some time. The airline was in so much trouble, it was paying bills with unearned revenue, according to a report in The Globe and Mail.

The paper says the discount airline took in millions of dollars through advance ticket sales, and faced the prospect of having to honour thousands of free travel vouchers before filing for bankruptcy protection.

Many of those vouchers were given to passengers for flight cancellations just before Christmas and in recent weeks, to placate passengers angry over poor service.

Near the end of last year, Jetsgo had $48.5-million in unearned revenue on deposit. By the end of February, Jetsgo's losses totalled $55 million over the previous eight months, as the company engaged in a brutal fare war against WestJet and Air Canada.

WestJet CEO Clive Beddoe says he has questions about whether there should be regulations to prevent advance ticket sales.

"It would certainly lead to a much more healthy industry. We would certainly be one that would support that," he told CTV's Question Period Sunday.

Pilot disputes safety concerns

Then there were the safety concerns adding to the pressure on Jetsgo. The airline was forced to undergo a safety audit sanctioned by Transport Canada and an investigation launched by the Transportation Safety Board of Canada contributed.

The Safety Board ordered its probe after a bungled landing Jan. 20 at Calgary International Airport. Though there are hundreds of aviation "incidents" reported annually to the Safety Board, such full investigations are rare.

A former Jetsgo pilot doesn't believe safety was a contributing factor in the demise of the airline. Capt. Alex Gallagher told Canada AM Monday morning that hydraulic oil leaks are not unusual nor are engine and instrument panel troubles.

"I can tell you right now: I've put my family on those airplanes. If we knew it was a safety issue, believe me: we would not be flying and the aircraft would not leave the airport, would not leave the ground, the gate," Gallagher said.

But WestJet's Beddoe says his airline doesn't regularly have those problems and one shouldn't assume that such incidents are "normal."

"I think that's not true. I don't believe that for one second. We've had thousands and thousands of flights without incident. This is not true."

Jetsgo ticket holders can call the Canadian Transportation Agency at:

1-888-222-2592
1-800-669-5575 (Toll Free)

With files from CTV Toronto's Austin Delaney