44 motorbuses stored in the depot were destroyed, with another 21 damaged, forcing the Corporation to disperse its bus fleet across the city's various parks.

[2] Following deregulation taking effect on 26 October 1986, the co-ordination agreement between KHCT and EYMS, which was now owned by its management,[11] was abolished, and the two operators became engaged in competition from the late 1980s until 1994.

[19][20] KHCT's external ventures were sold or dissolved throughout 1992,[18][21] and the company were removed from the Crown Card ticket scheme amid sustained competition with EYMS.

[22] Faced with escalating financial losses and increased competition, Kingston upon Hull City Council sold KHCT to Stockton-on-Tees based Cleveland Transit in December 1993.

[2][23][24] This deal saw KHCT's employees take a 49% stake in the company,[25] with a new livery of white and blue featuring a yellow band as well as a straplined logo reading "Employee Owners Working for You" similar to that of Cleveland's adopted,[26] and a year later, the deal led to KHCT's 'bus war' with EYMS ending after both companies agreed to co-ordinate their Hull timetables.

[27] Half of the city council's £2.7 million (equivalent to £6,947,000 in 2023) profit from the sale, however, was lost to a £1.4 million (equivalent to £3,602,000 in 2023) debt owned to Humberside County Council,[28] and immediately after the sale, 18 drivers and four managers were laid off by KHCT in an attempt by Cleveland Transit to make the company turn a profit.

[17] Following a scaling-back of operations, however, Citilink buses were repainted into an all-white livery for exclusive use on Hull City Council contract school services.

[41][42] As well as its core operations across Hull and Humberside, the Kingstonian coaching arm also expanded into Continental Europe shortly after deregulation with KHCT's acquisition of the formerly Eastern National-owned Voyage National in France in 1988, followed by acquiring the family-owned Kivits Reizen of Vlijmen in the Netherlands in 1990.

[18][47] During the trial of KHCT's finance director John King by an industrial tribunal on claims of unfair dismissal, from 1991 until its closure, The Garage had been suffering from serious financial irregularities.

[1] Throughout the 1960s and 1970s, KHCT standardised on the Leyland Atlantean rear-engined double-decker bus, purchasing 241 of the type between 1960 and 1981, a majority built with Charles H. Roe bodywork.

[60][61][62] On 8 February 1983, a KHCT double-decker running empty to Bransholme slipped on ice while trying to avoid a seven-car pileup and overturned off the Sutton Road Bridge down 30 feet (9.1 m) into an allotment garden.

[63] On 17 October 1986, a KHCT double-decker was stolen and taken on an hour-long joyride in the middle of the night through Hull city centre; the bus eventually broke down and collided with a tree on the Ings Road Estate.