US Contracts/UK Initiative

FirstGroup PLC
16 August 2000



                                FIRSTGROUP PLC                                
               EXTENSION TO US SCHOOL BUS OPERATIONS FOR AUTUMN               
                        TERM AND NEW INITIATIVE IN UK                         

FirstGroup announces that First Student, its US school bus operation, has
secured new contracts to operate an additional 616 new school buses commencing
with the autumn term which starts this week.  All the contracts represent
business that has been won on new tenders acquired since February 2000. First
Student now operates a total of 11,589 buses, an increase of 5.5% compared to
last year, and ahead of the division's target for its expansion in its first
year of operation as part of FirstGroup.   

The contracts include new operations in 10 states the largest being in
Charleston, South Carolina, Wilson County, Tennessee and Torrance and Compton
California.

Tony Osbaldiston, Deputy Group Chief  Executive, said 'Our first year growth
has exceeded our forecast and confirms the strength of our strategy of growing
our business organically. We have made an excellent start to the new school
year and we are excited about the identified growth opportunities for the
coming year.'

In a further development the Group today introduced an American style yellow
school bus to the UK as part of a demonstration to local authorities with the
objective of launching a pilot operation in the New Year.

Moir Lockhead, FirstGroup's Chief Executive, said: 'In the United States 54%
of children under 12 use a school bus while in this country only 20% of all
ages use one.

We believe this service can reduce the 20% of rush hour traffic caused by the
school run, improve child road safety and help schools by getting children to
their classes ready to start the school day.

'We believe the yellow school bus concept is the catalyst for change - it is 
recognised, known and trusted. We believe it will give more parents the
confidence to let their children go to school by public transport.'
 
FirstGroup plc
Contacts:
Moir Lockhead        Group Chief Executive        020 7291 0510
Iain Lanaghan        Group Finance Director       020 7291 0510