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FOR IMMEDIATE RELEASE

SPACEHAB COMPLETES REFINANCING OF SPACECRAFT PROCESSING FACILITY

Houston, Texas, February 3, 2004 - SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced the closing of the refinancing for its Astrotech Spacecraft Processing Facility (SPF) in Titusville, Florida. The new loan agreement with SouthTrust Bank substantially reduces the outstanding principal balance, lowers the fixed rate by more than 2.0%, shortens the loan by four years, and eliminates the hedge instrument of the previous loan.

As announced in October 2003, SPACEHAB's Astrotech Space Operations subsidiary received a $17.5 million payment from The Boeing Company (NYSE: BA) upon termination of a contract for payload processing support services. Boeing indicated that the decision to terminate the contract was based on the downturn of the commercial expendable launch market and anticipates that it will continue to rely on Astrotech facilities and services for future launches.

SPACEHAB has applied approximately $9.9 million of the proceeds from the contact termination towards the balance on the SPF mortgage which was secured, in part, by the contract revenues anticipated under the Boeing contract. SPACEHAB also applied approximately $1.3 million of the proceeds to terminate an interest rate hedge agreement entered into simultaneously with the original financing.

"We are very pleased with the refinancing agreement," said Brian K. Harrington, SPACEHAB Senior Vice President and Chief Financial Officer. "The new loan fits within our liquidity requirements, further improves our balance sheet, and provides for attractive terms."

The original loan agreement with SouthTrust Bank was in the amount of $20.0 million. After applying the proceeds noted above, and payments on the loan to date, the loan with SouthTrust Bank was restructured to the amount of $6.1 million, with a termination of January 28, 2007.

"The Company expects to provide continued support to Boeing for future Delta missions at both the Florida and Vandenberg Air Force Base facilities under future contracts," said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. "In the meantime, Astrotech remains under contract with Lockheed Martin Corporation for payload processing services in its Florida facility in support of the Atlas program," added Kearney. The contract expires in 2006 and has four additional one-year option periods available to extend the base period of performance on the contract through 2010.

Astrotech also provides payload processing services under contracts to NASA, the Sea Launch Company LLC, and Orbital Sciences Corporation. The Company, which has typically provided payload processing services to the commercial market, has seen growth in its government business in recent years.

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" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. In addition to those risks and uncertainties discussed herein, such risks and uncertainties include, but are not limited to, whether the Company will fully realize the economic benefits under its U.S. National Aeronautics and Space Administration ("NASA") and other customer contracts, whether NASA and other customers will continue to utilize the Company’s habitat modules and related commercial space assets, whether plans to complete the International Space Station ("ISS") are fulfilled, continued availability and use of the U.S. Space Shuttle system, technological difficulties, product demand and market acceptance risks, the effect of economic conditions, uncertainty in government funding, the impact of competition, delays and uncertainties in future space shuttle and ISS programs, resolution of the Company's indemnification claim with NASA arising from the loss of the Columbia orbiter and its crew during the STS-107 mission, and other risks described in reports filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements.

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