Tauranga's distinctive bright yellow Bay Hopper buses will be disappearing from suburban bus runs after local operator Bayline Coaches lost the contract to rival firm Go Bus.
The new Go Bus service, starting at the end of June, will include buses on Sunday, on all public holidays except Christmas Day, and later weekday runs.
Hamilton-based Go Bus's tender price was $3 million less than other bidders including Bayline, which has built up the Tauranga urban bus service over the past seven years.
The latest five-and-a-half year contract, from the middle of next year, is worth nearly $7.5 million, with the costs shared equally by Environment Bay of Plenty, NZ Transport Agency and the collection of bus fares.
The regional council, which manages the contract, has an option to alter fares and introduce extra services.
Go Bus has provided urban transport services in Hamilton for several years, and this year also won the contract for Napier and Hastings.
Andrew von Dadelszen, chairman of Environment Bay of Plenty's transport committee, said there was just too much variance in the tender prices and "we have to look after the interests of the ratepayers".
"We are talking several million dollars difference - $100,000 represents 1 per cent rates rise. If it was close I'm sure we would have found a way (to keep Bayline)."
Mr von Dadelszen said he had worked closely with Bayline. "They've been a really good operator and they've built the service up. I'm a bit gutted it's gone the way it has, and my heart goes out to the Bayline staff and drivers."
Bayline managing director Tony Lugg said he was disappointed at losing the Tauranga contract, which it had held since April 2001.
"We've created the service out of nothing. It's new news for us and we weren't expecting it. We'll just have to work through the issues with our Bayline family."
Among those issues was the prospect of job losses, which Mr Lugg conceded was a possibility, as well as bus drivers leaving to work for Go Bus.
Mr Lugg said Bayline had run 25 buses daily, plus spares, as part of the Tauranga urban service.
He said Go Bus had been actively trying to expand its market share.
"They've been pretty aggressive in New Zealand in tendering for school bus services and also for urban work."
Bayline was likely to utilise its Bay Hopper buses in other parts of its business, and planned to focus on its charter work and school bus runs.
Mr Lugg said the future of the company remained secure. "It's survived a lot of ups and downs in its time and it'll survive this."
Mr Lugg said Bayline would probably try to win back the Tauranga contract when it came up for tender again.
Go Bus commercial director Craig Worth said the company was "delighted" to have won the Tauranga contract.
Mr Worth said Go Bus, which had been operating in Te Puke and Mount Maunganui for about 10 years, would run 35 buses as part of the new service, half of which were yet to be built.
Mr Worth said Go Bus would be looking to fill 42 positions, and was keen to work with anyone who had lost their job because of the contract changeover.
Go Bus' immediate priorities were getting its new buses built and ensuring its depots in Tauranga, Mt Maunganui and Te Puke met its requirements, before looking at employing people.