1. A computer based method for compressing digital hyperspectral data having a plurality of spectral bands, each band having a plurality of image pixels N xy , the method comprising: reducing the plurality of spectral bands of the hyperspectral data to a smaller number of spectral bands using principal component analysis; determining an optimum compression ratio for each of the smaller number of spectral bands for use in a wavelet transform; and subsequently compressing the smaller number of spectral bands spatially using the wavelet transform with the optimum compression ratios.