Facilities, Expertise, Past Performance and Innovative Solutions Position Company for Major Win

Houston, Texas, January 19, 2006 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, announced today that the Company will be competing for the opportunity to serve as NASA’s supplier of commercial International Space Station logistics services.

In support of a solicitation released yesterday, SPACEHAB is pursuing a Space Act Agreement for NASA’s Commercial Orbital Transportation Service (COTS) Demonstration, a program with anticipated funding of $500 million. “NASA is seeking a commercial service to provide cargo transportation to and from the International Space Station, and we have been doing a major part of that job for the past decade,” said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. “I am confident our proven expertise and established infrastructure in this area, and the versatility that our approach provides, give us an advantage in this competition.”

SPACEHAB is leveraging its extensive hands-on experience in architecting, defining, developing and operating commercial space flight asset services. As commercial payload service supplier to the space shuttle program and commercial cargo service provider to both the space station Mir and the International Space Station programs, SPACEHAB has a unique understanding of the challenges inherent in commercial crew and cargo services. As a participant in a number of applicable NASA space architecture studies including Alternate Access to Station, Orbital Space Plane, and NASA’s Lunar Exploration System of Systems, SPACEHAB has been involved in major NASA cargo transportation system trade studies that drive out optimum solutions.

Along with the Company’s proven flight hardware and cargo supply capabilities, SPACEHAB is also a leading authority in the commercial space market, an important component of the COTS initiative. Helping organizations take advantage of the unique environment of space has been a mainstay in SPACEHAB’s space commerce market expansion. “As a pioneer in space commerce since 1984, we understand the upside, and downside, of commercial markets and the funding of commercial developments,” added Kearney. “Couple this experience with the foundation laid working with potential customers and suppliers to define a truly commercial spacecraft service, and we are able to propose an optimal COTS solution. For SPACEHAB, this is an opportunity whose time has come.”

In addition to the Company’s extensive expertise in space hardware design and development, payload processing, and flight services capabilities, SPACEHAB’s Astrotech subsidiary is renowned for its state-of-the-art spacecraft processing facilities and for related support services, critical elements of the COTS proposal requirements. Astrotech’s 62-acre campus, adjacent to NASA’s Kennedy Space Center, comprises payload processing facilities, cleanrooms, customer work areas and meeting facilities that are used to support the majority of unmanned commercial launch vehicles, and many government spacecraft, in the United States. The Company is prepared to do the same for this space station supply effort.

While responding to NASA’s COTS proposal as a prime team member, SPACEHAB is supporting alternate team proposals in a subcontractor role. “Regardless of which teams are selected to support this demonstration, SPACEHAB expects to benefit from this availability of commercial services since we know best the space market and how to develop that market,” added Kearney. “When a commercial service to low earth orbit is established, our unique payload processing facilities, our cargo processing expertise, and our knowledge of supporting humans in space will be key to accomplishing any commercial space activities on the International Space Station.”

The deadline for proposal submission to NASA is March 3, 2006 with one or more awards expected to be announced in May 2006. With a prime bid accepted, SPACEHAB will commence development of its COTS solution, demonstrating its capability to rendezvous and dock with the International Space Station and dispose of or return needed equipment and supplies. According to NASA, the objective of the spaceflight capability demonstrations is to stimulate commercial enterprises in space and lead to innovative, cost effective access to low-Earth orbit. NASA anticipates that upon the successful demonstration of the mission capabilities prior to a 2010 timeframe, NASA will issue contracts to competitively procure commercial services to supply the International Space Station.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial and government space services with three primary business units. The Flight Services business unit develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA’s Space Shuttles for Space Station resupply and research purposes. SPACEHAB’s Astrotech subsidiary provides payload processing support services for both commercial and government customers at company-owned facilities in Florida and California. The Company’s Government Services business unit supports NASA’s Johnson Space Center providing configuration management, product engineering, and support services for both the Space Station and Space Shuttle programs. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

The statements in this document may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, continued government support and funding for key space programs, product performance and market acceptance of products and services, as well as other risk factors and business considerations described in the company’s Securities & Exchange Commission filings including the annual report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements.


Kimberly Campbell
Vice President
Corporate Marketing and Communications