Statement re: Northern Rail Franchise

1 July 2004

                                FIRSTGROUP PLC                                 

                       Statement re: Northern franchise                        

First said today that it was disappointed not to have won the Northern
franchise.

Chief Executive Moir Lockhead said: 'We put in a very strong and competitive
bid for this franchise, which we believe would have offered value for both
passengers and our shareholders. On this occasion we were not successful. We
wish the new Northern franchisee well and look forward to bidding for both the
Inter City East Coast and Integrated Kent franchises.

'As operator of the TransPennine Express franchise and Hull Trains we will
still have an important role to play in the regeneration of rail services in
the north of England and as the largest bus operator in the region we look
forward to working with the new franchisee to provide a fully integrated
network of buses and trains across the area.'

FirstGroup contacts:

Dean Finch, Finance Director 07788 178942

Michael Mitchell, Corporate Communications Director 020 7291 0504

Notes for Editors

FirstGroup plc is a UK based international transport company with a turnover of
nearly £2.5 billion a year, and some 62,000 employees throughout the UK and
North America.

  * First is Britain's largest bus operator running more than one in five of
    all local bus services. A fleet of some 9,300 buses carries 2.8 million
    passengers a day in more than 40 towns and cities.
   
  * First is also one of the UK's largest rail operators with four passenger
    franchises - First Great Western, TransPennine Express, First Great Western
    Link and First North Western and one open access operator - Hull Trains.
   
  * First is the Preferred Bidder for the ScotRail franchise.
   
  * First operates nearly one-sixth of the UK passenger rail network, with a
    balanced portfolio of inter-city, London commuter and regional services.
   
  * First also operates freight services through GB Railfreight.
   
  * It holds the operating contract for the Croydon Tramlink network, which
    carries over 20 million passengers a year.
   
  * In North America, First has three operating divisions: Yellow School Buses
    (First Student), Transit Contracting and Management Services (First
    Transit) and Vehicle Maintenance and ancillary services (First Services).
    Headquartered in Cincinnati the businesses operate across the US and
    Canada.
   
  * 
      + First Student is the second largest provider of Yellow school buses in
        the USA and the third largest in Canada. With a fleet of over 17,400
        school buses it transports nearly one million students everyday.
       
      + First Transit is one of the largest private sector providers of urban
        bus services in the US, managing public transport systems on behalf of
        cities such as Houston, Los Angeles and Denver.
       
      + First Services is the largest private sector provider of vehicle
        maintenance in the US. Maintaining fleets and equipment for primarily
        public sector customers such as cities, counties, fire and police
        departments