Philippine Airlines (PAL) is not ready to abandon the domestic market – at least not yet. The floundering flag carrier, which has seen its share of the Philippine domestic steadily slip in recent years, plans to add back some domestic capacity in 2012 as its previously-reduced A320 fleet expands again by four aircraft.

International capacity will also be up in 2012 as PAL takes its next batch of B777-300ERs. PAL is banking on the Philippines regaining next year a Category 1 safety rating from the US FAA, which is necessary for the carrier to deploy B777-300ERs on US routes as planned. Continued restrictions on US routes is one of several challenges PAL faces as the carrier also tries to overcome increasing competition from LCCs and continuing worker protests.