NASA Approval Will Generate Contract Extension

SPACEHAB, Incorporated (NASDAQ/NMS: SPAB),
a leading provider of commercial space services, today announced that it is
equipped and engaged to support NASA in its aim for a safe return to flight
as early as the fall of 2003. SPACEHAB is under contract to provide
high-value flight assets and logistics services on three of the next five
Space Shuttle missions.

SPACEHAB has been authorized by NASA to submit a request for equitable
adjustments under the Research and Logistics Mission Support (ReALMS)
contract to cover expenses associated with launch delays on Shuttle missions
STS-116 and STS-118. The Company continues with day-to-day operations
preparing for these missions that provide important contributions to the
completion of International Space Station (ISS) assembly.

NASA has outlined two mission scenarios, the first showing targeted launch
dates for STS-116 on December 18, 2003 and STS-118 on May 6, 2004. The
second scenario would delay the STS-116 launch until July 24, 2004 and the
STS-118 launch until November 13, 2004. For both of these missions, SPACEHAB
is contracted to provide a Logistics Single Module and an Integrated Cargo
Carrier (ICC) to support resupply requirements for the orbiting space
station.

“During SPACEHAB’s more than ten years of Shuttle mission performance, we
have never missed a ReALMS deliverable or milestone,” said SPACEHAB
President and Chief Operating Officer, Michael E. Kearney. “This achievement
equates to more than 300 on-time deliverable milestones. And with SPACEHAB’s
current inventory of modules and carriers, we are prepared to support these
upcoming Shuttle flights as well as any special Launch On Need missions that
may materialize.”

Also at the request of NASA, SPACEHAB has been authorized to re-submit the
Company’s proposal for flight of the ICC on missions STS-122 and STS-125. If
accepted, this proposal would extend the ReALMS contract into mid-2006. The
ICC is a proven, valuable logistics transportation platform that has flown
on five missions to date.

For the STS-114 mission, SPACEHAB, under contract to The Boeing Company, is
providing a modified version of this unique cargo carrier, known as the
External Stowage Platform 2, or ESP2, that will be deployed and permanently
mounted to the ISS. STS-114 will be the first Space Shuttle mission since
the tragic loss of the STS-107 Columbia. According to NASA officials, this
mission may launch as early as fall 2003.

SPACEHAB remains committed to the ISS Program in support of NASA’s
initiatives and is able to provide logistics, research, or a combination of
both services within a single mission. By fully utilizing the Company’s
pressurized modules and unpressurized carriers, SPACEHAB is equipped to
support NASA in its transition from ISS assembly to operations. SPACEHAB is
further prepared to add new functionality to its existing fleet of flight
assets to enhance the capabilities already vital to the human spaceflight
program.

With more than $100 million in annual revenue, SPACEHAB, Incorporated is a
leading provider of commercial space services. The Company develops, owns,
and operates habitat and laboratory modules and cargo carriers aboard NASA’s
Space Shuttles. Its Johnson Engineering subsidiary provides orbiter crew
compartment integration, ISS stowage and configuration management, supports
astronaut training, and builds space-flight mockup trainers at NASA’s
Johnson Space Center in Houston. SPACEHAB’s Astrotech subsidiary provides
commercial satellite processing services at facilities in California and
Florida. Additionally, through The Space Store, Space Media provides space
merchandise to the public and space enthusiasts worldwide
(www.thespacestore.com).

This release contains forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected in such statements. Such risks and uncertainties
include, but are not limited to, whether the Company will fully realize the
economic benefits under its NASA and other customer contracts, the timing
and mix of Space Shuttle missions, the impact of the recent Columbia tragedy
on the Company’s existing and future business operations, the amount of any
indemnification payments the Company may receive for its RDM, which was lost
as part of the Columbia tragedy, the successful development and
commercialization of new space assets, technological difficulties, product
demand, timing of new contracts, launches and business, market acceptance
risks, the effect of economic conditions, the impact of war, uncertainty in
government funding, the impact of competition, and other risks detailed in
the Company’s Securities and Exchange Commission filings. The Company
assumes no obligation to update these forward-looking statements.