SPACEHAB Subsidiary Awarded $1.6 Million Contract for New Mission; Astrotech to Provide Payload Processing and Spacecraft Fueling Operations for Satellite Servicer.

HOUSTON -- SPACEHAB, Incorporated (NASDAQ:SPAB), a leading provider of commercial space services, today announced that its spacecraft processing and facility services subsidiary, Astrotech Space Operations, has been awarded a new $1.6 million payload processing contract by The Boeing Company (NYSE:BA) to support the U.S. Defense Advanced Research Projects Agency (DARPA) Orbital Express mission.

"We are quite pleased to be working with Boeing and its team on another exciting mission," stated Jim Royston, Astrotech Senior Vice President. "Astrotech's support not only includes use of our world-class satellite processing facilities, but takes advantage of our growing mission services such as spacecraft fueling."

The Orbital Express Advanced Technology Demonstration Program is intended to validate the technical feasibility of robotic, autonomous on-orbit refueling and reconfiguration of satellites. The mission, expected to reduce risk for future on-orbit servicing missions, is funded through DARPA, the central research and development organization for the U.S. Department of Defense. The Orbital Express spacecraft is scheduled for processing and encapsulation at Astrotech's Titusville, Florida facilities this September with an anticipated launch date of December 2006.

Ball Aerospace & Technologies Corp. (NYSE:BLL), a member of Boeing's Orbital Express team, is providing the Next Generation Satellite and Commodities spacecraft (NEXTSat/CSC) for this demonstration activity. This satellite employs elements from their BCP-2000, a highly accurate and proven spacecraft bus. This same bus system is baselined for use on SPACEHAB's Apex program, the Company's own commercially provided vehicle supplying a comprehensive end-to-end space access service. Apex is designed to support a wide range of mission requirements such as on-orbit research and orbital operations, as well as the delivery of cargo and crew to low earth orbit, including the International Space Station via NASA's Commercial Orbital Transportation Service (COTS) initiative.

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.