SPACEHAB To Support Commercial Orbital Transportation Partners.

HOUSTON -- With NASA's announcement on August 18 of SpaceX and Rocketplane-Kistler as its funded partners under the Commercial Orbital Transportation Services (COTS) program, the era of commercial space has taken a bold new step. SPACEHAB, Incorporated (NASDAQ:SPAB) has been in the business of providing commercial access to space for over twenty years and has supplied NASA with its research and laboratory modules and carriers for use on the space shuttle since 1993. Currently, SPACEHAB is the only company regularly operating commercial assets to and from space and on the International Space Station. With NASA's COTS award, the emergence of a private space enterprise is here, and SPACEHAB is poised to provide the facilitating services that NASA's new partners will require for a successful commercial endeavor.

"We are extremely proud of the work our team accomplished on the COTS proposal, delivering NASA an outstanding and technically comprehensive approach which included elements for processing payloads for International Space Station provisioning while stimulating space commerce," stated Michael E. Kearney, SPACEHAB President and Chief Executive Officer. "While we were disappointed that SPACEHAB was not selected as a prime in this program, we are proud of the capabilities we provide, and we look forward to assisting both COTS teams, offering integration and operations expertise, payload processing and facility services, and additional customer-driven spaceflight capabilities."

"COTS is a vital first step in opening the potentially vibrant market in low earth orbit," Kearney added. "NASA's investment in SpaceX and Rocketplane-Kistler will result in new opportunities for affordable, routine access for space utilization - current prime inhibitors to the emergence of commerce in space." With two decades serving the space utilization community, SPACEHAB expects to help further open the market to existing demand through these two suppliers much as it has done on the space shuttle, Russia's Progress spacecraft, and the European's Automated Transfer Vehicle.

As a strategic investment, SPACEHAB's Apex service has been optimized to respond to the full range of space customers, including NASA's International Space Station program. The Company believes that there are other markets to be served by Apex in parallel with its support to the COTS winners. "We intend to fully evaluate the business case for pursuing the next phase of our Apex program development for fulfilling the commercial sector's call for unrestricted, reliable space access for research and satellite deployment," said Brian K. Harrington, SPACEHAB Chief Financial Officer.

In support of NASA's International Space Station assembly and operations, SPACEHAB is busy preparing for the STS-116 mission in December that includes use of the Company's pressurized logistics module and unpressurized cargo carrier. These same assets are also being employed by NASA on the STS-118 space shuttle flight scheduled for liftoff next year with the added feature of using a deployable version of the Integrated Cargo Carrier that will be permanently mounted on the space station and serve as a second on-orbit spare parts platform. SPACEHAB is pursuing more contracts that utilize its assets, and management has identified at least four missions conducive to the Agency's needs.

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.