Pennine Motor Services – which runs a fleet of 14 orange and black buses throughout Craven – will cease operating from May 16.
The company said this week that it was being forced to close because of losses incurred through free travel passes and more competition on some routes.
“It is a very sad day,” said company secretary Maurice Simpson, whose grandfather and two great uncles founded the business in 1925 and whose father, Norman, ran the firm for many decades.
“Unfortunately it is no longer financially viable,” he added.
Mr Simpson blamed the move on North Yorkshire County Council cutting its reimbursement for free travel by a fifth, leaving him with a deficit of £45,000.
“North Yorkshire reimburses 28.4 per cent of free travel whereas Lancashire pays back 56 per cent. That is our problem. There are also too many buses on our main bus route between Skipton and Barnoldswick.
“It is a disaster for our 19 drivers, seven or eight of whom have worked with us for more than 20 years. It has been a very difficult decision for myself and my family.”
And he warned that the closure would result in more people travelling by car which did not help the environment.
County, district and town councillor Robert Heseltine said: “The orange Pennine buses have been an integral part of the social and commercial fabric of Skipton, wider Craven and East Lancashire for generations. Their loss and the loss of local employment is a great sadness.
“The Simpson family have a long tradition of bringing economic benefit to Craven. It was they who, in the early 1900s, laid the setts on Skipton High Street. It was Norman Simpson who built the store at the entrance to Jerry Croft which brought Marks & Spencer to Skipton.
“Hopefully as one door closes another will open for the Simpson family and their employees, but it really is the end of a loved and respected bus transport era.”
A spokesman for North Yorkshire County Council said: “Pennine Motor Services operate a number of commercial services in the Skipton area and these carry some pupils who are entitled to free home to school transport. In the event that the company does cease trading the county council will make alternative arrangements to transport these children.
“We will also consider which, if any, of the commercial services we may wish to see continue to be provided and will seek to retain these through short term contracts.”