Mission Preparation and New Business Opportunities Underway

Houston, Texas, January 17, 2006 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, announced today that NASA has awarded new work to the Company in support of International Space Station assembly and operations activities.

New requirements for the International Space Station have resulted in NASA’s need to reprioritize the payloads set for launch on the STS-121 space shuttle mission currently set for liftoff in May 2006. These requirements have resulted in NASA engaging SPACEHAB’s support, through its contract with Lockheed Martin, in removing and replacing equipment set for launch on the Company’s cargo carrier being flown on this mission. SPACEHAB, in conjunction with EADS Space Transportation, will be incorporating the changes into the fourteen-month mission preparation process, of which just four months remain. The Company has been authorized approximately $500,000 for the first sixty days of this effort in support of NASA’s mission objectives.

“One of the many advantages of using a commercially provided carrier and related services is our ability to quickly respond to the customers evolving needs, allowing us to again demonstrate our flexibility, capabilities, and responsiveness,” stated E. Michael Chewning, Senior Vice President of SPACEHAB Flight Services. “Our external cargo carrier that rides in the shuttle’s cargo bay is ideal for ferrying this needed space station equipment, and we have the capability to accomplish the cargo changeout, support the current launch schedule, and provide a high-value commercial solution to NASA.”

In addition to the STS-121 mission, SPACEHAB’s Flight Services team continues its support of the STS-116 and 118 shuttle flights. These two missions use the Company’s cargo pallets, one set for permanent deployment and attachment to the space station, but also utilize SPACEHAB’s patented module system. The Company’s single module, used previously on the STS-95 John Glenn mission where he performed numerous experiments, is about the size of four rows in a Boeing 737 and is mounted in the shuttle cargo bay. The module is accessible to the crew via a tunnel so that astronauts can have a significantly larger working and living area than available in the ‘shirt-sleeve’ portion of the space shuttle. The single module will hold approximately 5,600 pounds of equipment and provisions, much of it transferred to the space station for use by the Expedition crews that live for extended periods in space.

Along with the extensive support of these logistics missions, SPACEHAB is poised to undertake new flight opportunities aboard the space shuttle to support NASA in its remaining space station construction and maintenance activities. As NASA seeks to transition from the space shuttle to the next generation of space vehicles, maximum capability and flexibility will be required for bringing the International Space Station into full operation on the remaining shuttle flights. SPACEHAB’s modules and cargo carriers are ideally suited to provide this supply capability while increasing shuttle mission efficiency.

To reiterate the Company’s ability to help NASA take full advantage of mission and cargo synergies, SPACEHAB has submitted two proposals associated with the Agency’s unpressurized logistics carrier needs. One proposal demonstrates SPACEHAB’s ability to manage NASA’s logistics needs through the remainder of the shuttle program through use of existing carriers and infrastructure. Through this approach NASA would not need to build a new, competing carrier system as currently planned, and would benefit from a significant cost savings by using existing technologies and proven commercial flight assets available and in use today. The second proposal leverages the Company’s proven ability to develop new commercial hardware by offering a carrier that is compatible with the space shuttle and expendable launch vehicles that could also support space station supply needs. This carrier can be ready for use in 24 months and satisfies NASA’s requirements for unpressurized cargo delivery following shuttle retirement in 2010.

“We are excited about the varying ways we are supporting and adding value to the nation’s space program,” added Chewning. “Specifically, through our commercial approach in providing quality spaceflight hardware and logistics services, all demonstrated capabilities on both the Mir and the International Space Station programs.”

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