Houston, Texas, July 12, 2005 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, announced at a press conference near the shuttle launch pad in Cape Canaveral, Florida that the Company has initiated development of a fully commercial roundtrip delivery service to low earth orbit and beyond. This initiative is a natural next step for SPACEHAB which has been a pioneer in space commerce for more than twenty years.

As an example, NASA is scheduled to launch the first commercially developed and deployable component of the International Space Station onboard Space Shuttle Discovery - SPACEHAB's Integrated Cargo Carrier. Known on the STS-114 mission as the External Stowage Platform 2, this pallet will be attached to the orbiting station where it will serve as a permanent spares warehouse. This accomplishment set the stage for SPACEHAB to unveil the Company's new capability for conducting business in space - a modular multipurpose spacecraft system dubbed Apex.

Currently, the only method for transporting cargo and experiments to and from space are on government-owned spacecraft such as the space shuttle. The Apex system offers a means for accessing the unique environment of space through a private enterprise, further opening the door to a broader market.

"Not only is Apex a viable option for commercially re-supplying the International Space Station," said Michael E. Bain, SPACEHAB Chief Operating Officer. "It is also a flexible system that can act as an in-space resource module providing power, data, and thermal support or serve as an unmanned orbiting laboratory that brings experiment results safely back to earth." With Apex, customer requirements will drive the development of system capabilities, ensuring that there is a specific demand for a particular service before the appropriate vehicle configuration is built.

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

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