SPACEHAB SUBSIDIARY AWARDED NEW CONTRACT

SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, announced that its Astrotech Space Operations subsidiary has been awarded a new contract by NASA/Kennedy Space Center to provide payload processing services for the AURA mission at Vandenberg Air Force Base (VAFB), California. Scheduled for launch in January 2004, AURA is part of the Earth Observing System (EOS) program to study the Earth’s environment and climate changes.

The contract, valued at approximately $700,000, will provide for Astrotech processing support from satellite arrival at VAFB through transfer to the Delta II launch complex. Though the processing and launch of the satellite are conducted from Vandenberg, the EOS AURA satellite, instruments, and science investigations are managed by NASA’s Goddard Space Flight Center in Greenbelt, Maryland. Its mission, expected to last over five years, is designed exclusively to conduct research on the composition, chemistry, and dynamics of the Earth’s upper and lower atmosphere employing multiple instruments on a single satellite. The first and second EOS missions, Terra and Aqua, are designed to study the land, oceans, and the Earth’s radiation budget.

Astrotech also recently celebrated its contribution to the successful launch of the Rainbow 1 Direct Broadcast Satellite (DBS) on July 17, 2003, on board a Lockheed Martin Atlas V launch vehicle from Cape Canaveral Air Force Station in Florida. Both an industry and Company milestone, Rainbow 1, also built by Lockheed Martin, was the first commercial, 5-meter class spacecraft to be processed at Astrotech. Located on the Company’s Titusville, Florida 62-acre campus, Astrotech’s new Spacecraft Processing Facility (SPF) was the temporary home of this satellite system and is the only processing facility at Kennedy Space Center/Cape Canaveral Air Force Station specifically designed to accommodate the larger satellites for launch on the International Launch Services Atlas V and Boeing Delta IV families of launch vehicles.

Also on the current mission manifest, Astrotech supported the final preparations for the August launch of the EchoStar IX/Telstar 13 satellite on a Sea Launch rocket. Astrotech provides payload processing as well as facilities operations and maintenance support at the Sea Launch Home Port in Long Beach, California. Built by Space Systems/Loral of Palo Alto, California, the EchoStar IX/Telstar 13 spacecraft will join EchoStar's current satellite constellation that provides DISH Network customers with hundreds of all-digital television channels, including interactive TV services, sports programming, high-definition television, and international programming. In addition to also having one of the first commercial Ka-band spot-beam payloads in the United States, this spacecraft also carries the Loral Skynet-owned Telstar 13 payload, which will provide cable programmers with coverage of North America. The satellite will launch on a Zenit-3SL rocket from a Mobile Launch Platform positioned on the equator.

About SPACEHAB
With more than $100 million in annual revenue, SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial space services. The Company develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA’s Space Shuttles for space station resupply and research purposes. Its Government Services business unit provides Space Station and Space Shuttle support services including orbiter crew compartment integration, stowage, and configuration management to NASA's Johnson Space Center in Houston. SPACEHAB’s Astrotech subsidiary provides commercial satellite processing services at facilities in California and Florida. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, whether the Company will fully realize the economic benefits under its NASA and other customer contracts, the timing and mix of Space Shuttle missions, the impact of the recent Columbia tragedy on the Company's existing and future business operations, the amount of any indemnification payments the Company may receive for its RDM, which was lost as part of the Columbia tragedy, the successful development and commercialization of new space assets, technological difficulties, product demand, timing of new contracts, launches and business, market acceptance risks, the effect of economic conditions, the impact of war, uncertainty in government funding, the impact of competition, and other risks detailed in the Company's Securities and Exchange Commission filings. The Company assumes no obligation to update these forward-looking statements.

For more information, contact:
Haris Tajyar
Managing Partner
Investor Relations International
Phone 818.981.5300
Fax 818.981.5303
htajyar@irintl.com

Kimberly Campbell
Director of Marketing
SPACEHAB, Inc.
Phone 713.558.5049
Fax 713.558.5957
campbell@spacehab.com