Houston, Texas, May 3, 2006 – SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, announced today that the Company has received contract authority to proceed with mission integration services for a new stowage platform that will be flown on the STS-118 space shuttle flight and permanently mounted to the International Space Station.

The STS-118 mission originally called for SPACEHAB’s Logistics Single Module and a standard Integrated Cargo Carrier. In February 2005 NASA decided to convert the cargo carrier to a deployable platform to be transferred to the International Space Station for storage of on-orbit spares. While initial engineering work to configure the carrier for use as a stowage platform has been completed, the majority of the effort has been on hold, until now, due to delays in the shuttle flight schedule.

“We are excited about the initiation of this work, providing an efficient and proven cargo carrying solution that meets NASA’s space station needs for transporting and storing spare parts,” said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. Known as the External Stowage Platform 3 (ESP3), this modified version of SPACEHAB’s existing Integrated Cargo Carrier will be launched aboard NASA’s twenty-second space station flight, currently scheduled for June 2007. This will be the ninth flight of this commercial unpressurized pallet resource.

The integration and operations work will be performed through subcontract to Lockheed Martin Corporation (NYSE: LMT), NASA’s Cargo Mission Contract prime contractor. Although negotiations for this change have not been finalized, the contract value is expected to be on the order of $13 million.

SPACEHAB provided a similar cargo carrier for NASA’s return to flight mission, STS-114, that launched in July 2005. The External Stowage Platform 2 (ESP2), which was deployed from the space shuttle’s cargo bay via the robotic arm and permanently mounted to the space station, serves as the largest commercially provided component of NASA’s ISS program.

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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