She found herself picking up the same passengers on her shifts and got to know them.

Later that year, Mrs Pannell discovered many of them weren't looking forward to Christmas.

"They'd had husbands die or things that had gone wrong, so Christmas wasn't going to be a happy time, which I always thought it was," she said.

"I was the second oldest of seven kids, so Christmas was always a big thing at home.

"Anyway, I thought I'd try to cheer them up.

"The first year was just a roll of tinsel and a cassette player playing Christmas carols on the dashboard of the bus.

"Every year, I just added more."

Now Mrs Pannell's famous Christmas bus is adorned with flashing lights on its wheels, yuletide-themed seat covers, beaming pictures of Santa, Christmas decorations and plenty of tinsel.

"Every passenger gets a lolly. The kids get candy canes, tickets get stamped with the Christmas bus stamp on them," she said.

Many passengers began offering money for the lollies and the Christmas cheer.

"But I wasn't in a position where I could take it when I first started," she said.

"We had a change in management in 2005 and they embraced the idea.

"I stuck a money box on the front and we've donated the proceeds to the Mater Hospital ever since."

Just in the past two years, Mrs Pannell's Christmas bus has raised more than $5000 for the Mater.

"It costs me money but it's my little donation," she said.

"My youngest daughter's dad died of a brain tumour in the Mater two years ago. The Mater was always so good to him; he was sick for a long time, and they were excellent.

"It's targeted at the oncology unit in there. I just wanted to give a little bit back."

Channel Ten aired a half-hour documentary on the bus, which then inspired Sydney Buses to run a competition whereby the winning depot would receive $500 for its favourite charity.

"There is another lady in Belmont who does a Christmas bus now too but because we're in Newcastle, we haven't been involved in the competition," Mrs Pannell said.

"So we just share the prize money and give it to the Mater."

Last year, Mrs Pannell also gifted some of the money raised to the John Hunter Hospital.

The Newcastle-to-Stockton ferries are also given Mrs Pannell's treatment each Christmas.

When she first began the Christmas bus, no other drivers would be "caught dead" driving it.

"But now I've got my list of Santa's helpers and they fight over who has the most shifts now," she laughed.

"My daughter is a driver so she does her share of shifts and my partner is the Santa."

The driver of the bus gets plenty of waves and beeps from passing traffic.

"So once they drive it, they're hooked."

Mrs Pannell also does a few extra voluntary trips in the bus.

"I will occasionally take the nurses from the Mater up to see the Christmas lights and I've done a few trips for retirement villages as well.

"I just like to see the smiles on people's faces.

"They are so appreciative."