SPACEHAB Appeals Decision for Losses on Space Shuttle Mission

SPACEHAB APPEALS DECISION FOR LOSSES ON SPACE SHUTTLE MISSION

Houston, Texas, January 5, 2005 - SPACEHAB, Incorporated (NASDAQ/NMS: SPAB),
a leading provider of commercial space services, announced that it filed an
appeal last week with the Armed Services Board of Contract Appeals regarding
NASA's limited response to the Company's claim for the February 2003 loss of
its Research Double Module (RDM) in the Space Shuttle Columbia tragedy.

In January 2004 SPACEHAB filed a formal proceeding with NASA seeking
indemnification under the Company's contract with the Agency in the amount
of $87.7 million for the value of the Company's RDM and related equipment
that was destroyed during the shuttle mission. NASA responded to this
contract claim in October 2004 determining that its liability is limited
under the contract to $8.0 million.

SPACEHAB received payment of $8.2 million, which included $0.2 million of
interest, from NASA in October 2004. As previously announced the Company
maintained the right to appeal NASA's decision to deny its claim for
indemnification in excess of $8.0 million and has now officially exercised
this right.

Simultaneous with the appeal of the contract claim, the Company is pursuing
a formal claim filed against NASA under the Federal Tort Claims Act seeking
restitution of losses totaling in excess of $79.7 million asserting NASA's
negligence that led to the space shuttle accident and the destruction of the
RDM. Since the filing and announcement of this tort claim in November 2004,
the Company has not received a response from NASA. In the event that this
administrative tort claim is denied, SPACEHAB has the right to pursue the
claim further in Federal district court.


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.

For more information, contact:

Kimberly Campbell
Vice President, Corporate Marketing and Communications
SPACEHAB, Inc.
Phone 713.558.5049



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Jacques :-)

www.spacepatches.info