SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced that it has completed the next phase of its corporate reengineering activities to enhance its operating plan and competitive position.

In January 2001, SPACEHAB implemented a multi-faceted plan to stabilize the Company and improve its financial health. The continuous successful execution of this plan has resulted in an improved financial position, satisfactory operating margins and costs, and a reduction in debt obligations. SPACEHAB has recently taken additional steps to implement a new organization structure, reduce excess staffing levels, and streamline sales, general, and administrative expenses.

SPACEHAB has reorganized its Johnson Engineering subsidiary to optimize the Company’s ability to perform government cost-type contracts, particularly new business opportunities in support of the International Space Station program. Now doing business under the name of SPACEHAB Government Services (SGS), this business unit successfully provides high-value engineering and related aerospace services primarily to NASA’s Johnson Space Center.

Mr. Dan A. Bland, who is currently SPACEHAB’s Senior Vice President of Space Flight Services, will expand his responsibilities to include leadership of the SGS business unit. In this role he will oversee SPACEHAB’s commercial and government contracts and new business pursuits. Within SGS, an Advanced Programs group has been created to lead the execution of new programs, such as Orbital Space Plane, that build on SPACEHAB’s existing core competencies and develop a ‘bridge’ to future business.

Furthermore, Business Development has been centralized and combined under the Strategic Programs organization in order to facilitate a coherent approach for pursuing future involvement in space flight markets. This strategic organization, led by Mr. Karol “Bo” Bobko, SPACEHAB Vice President and former NASA astronaut, encompasses the business development process, strategic planning, and all research and development activities.

“In order to enhance the performance of our business units and to align them with our strategic objectives, the Company has instituted a new corporate structure,” said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. “This structure supports short-term goals, helping us refocus our organization toward activities important to us today, such as ISS Program contract consolidation, and it revitalizes our strategic momentum.”

About SPACEHAB

With more than $100 million in annual revenue, SPACEHAB, Incorporated (www.spacehab.com) 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 for space station resupply and research purposes. Its Government Services business unit provides Space Station and Space Shuttle support services including orbiter crew compartment integration, stowage, and configuration management to 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.

For more information, contact:

Haris Tajyar
Managing Partner
Investor Relations International
Phone 818.981.5300
Fax 818.981.5303
htajyar@irintl.com

Kimberly Campbell
Director of Marketing
SPACEHAB, Inc.
Phone 713.558.5049
Fax 713.558.5957
campbell@spacehab.com