Members were disappointed with the outcome, hoping that Dutch company First Group would win the bid which they feel offered a "better package".
First Group submitted proposals to allow for a partial redoubling of track between Farnham and Bentley to allow a half-hourly service to operate reliably to Alton, which is what Alton Line Users long to see.
First Group was also looking to improve power supply provision and line speeds to bring journey time reductions on this part of the network.
ALUA will now be pushing to get this included in the Stagecoach bid, which it feels is important in ensuring there are no delays.
Although disappointed with the outcome of the bid, ALUA chairman Chris Campbell was "delighted" Stagecoach is getting new trains and rolling stock.
A total of £1.7 billion is committed to investment in trains and infrastructure, including 800 new vehicles.
These new trains will begin to be delivered from the end of next year, and will enable slam-door trains to be eliminated from South West Trains by the end of 2004.
Six new 458s have already been seen in use on the Alton line, which Mr Campbell said is "a good sign", but notes there are still problems with trains breaking down on the line.
The importance of improving the service at Alton was expressed by Mr Campbell, especially in the light of the recent delays on the line and the fact that Alton is used by a vast number of commuters.
"Commuters are having such a bad time of it lately," he said. "We've got to improve the service and get more track back to improve reliability."
ALUA has heard a number of complaints recently from commuters about the number of trains terminating short of their destination.
Only last week one commuter said that at least three trains terminated short of their designated station, leaving people stranded and losing time.
The chairman of the Rail Passengers' committee has also expressed concern about the number of trains terminated on the Alton line.
Mr Campbell explained that once trains are 20 minutes late they terminate and he wondered how Stagecoach will overcome this. "Stagecoach has promised a half-hourly service. How will they run it with all the delays?"
The six regular commuters on the ALUA committee from Ash Vale to Bentley are against Stagecoach winning the bid because of the number of delays on the line and they feel they are owed money for bad service.
"Without extra track and improving things there will be problems," said Mr Campbell.
ALUA hopes to meet with Stagecoach soon to get some answers and to put its aspirations forward.