Spacehab Celebrates Launch and Activation of Commercial Payload

Company Shows that Access to Space is Available Today

SPACEHAB, Incorporated, a leading provider of commercial space services,
today announced that it has successfully delivered a thermal incubator
to the International Space Station (ISS) for one of its international
customers.

SPACEHAB is providing the Japan Aerospace Exploration Agency
(JAXA) with launch and on-orbit use of a protein crystal growth
incubation system under a contract with Mitsubishi Corporation,
SPACEHAB’s marketing representative in Japan. In an unprecedented
schedule of less than nine months, SPACEHAB and its subcontractors
were able to finalize contracts and then design, build, test, certify,
ship, and launch the experiment facility onboard a Russian Progress
vehicle which lifted off last Wednesday, August 11, 2004 from the
Baikonur cosmodrome.

“Even with the temporary grounding of the space shuttle, SPACEHAB
is pleased that we are able to offer timely and affordable commercial
access to space via our international alliance with RSC Energia,
Russia’s largest space company,” said Michael E. Kearney, SPACEHAB
President and Chief Executive Officer.

The cargo ship, an unmanned vehicle loaded with supplies and
equipment, docked to the orbiting space station on Saturday where
cosmonauts then successfully transferred and installed the experiment
hardware in the Russian segment of the ISS. Three sets of protein
experiments will be conducted through October 2005 at which time JAXA
has an option to acquire extended use of the hardware from SPACEHAB.

Kearney added, “We believe that this significant accomplishment,
and others like it performed by SPACEHAB in the past, clearly
demonstrate private industry’s ability to find commercial solutions
for space access, and that we are equipped with the resources,
expertise, and most importantly, the flexibility to achieve customer
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” 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.