First Student knows that a student's first assignment is to get to school, safely and on time. Together, First Student and sister company FirstCanada transport about six million students to and from their classrooms every day via a fleet of some 57,000 buses. As North America's #1 school bus business, they operate from a network of 650-plus locations, spanning 42 states in the US and eight provinces in Canada. In addition to transportation, the company offers a slew of ancillary services, including preventative maintenance, fuel (its storage and purchase), route optimization, used bus sales, and more. First Student is a subsidiary of FirstGroup America, which is a unit of UK bus and train operator FirstGroup.
First Student accounts for about a quarter of FirstGroup's revenues and slightly more of its operating profit. The difficult economic environment coupled with its impact on school board and district budgets has hurt the bus operator's performance. It has faced both a reduction in routes and school and non-schools charter activity. Unable to adjust its costs sufficiently, First Student suffered nearly a 30% decline in operating profits.
The corporate parent responded to the lack luster results by incurring a deep amortization charge, as well as slashing overhead costs along with its bus fleet. Intent on improving operating efficiency, too, First Student has installed a global positioning system (GPS) with vehicle tracking equipment onto most of its buses.
First Student has also been working to renew existing service contracts and win new ones. In this vein, it acquired East Orange, NJ-based Star Shuttle in late 2010. The deal picked up an established regional school and charter transportation service provider, approximately 70 buses, and some of Star Shuttle's workforce. The move builds upon First Student's acquisition in 2007 of Laidlaw International, formerly the leading school bus company in North America. – less