Polarization demultiplexing and multiplexing by means of conical refraction is proposed to increase the channel capacity for free-space optical communication applications. The proposed technique is based on the forward-backward optical transform occurring when a light beam propagates consecutively along the optic axes of two identical biaxial crystals with opposite orientations of their conical refraction characteristic vectors. We present an experimental proof of usefulness of the conical refraction demultiplexing and multiplexing technique by increasing in one order of magnitude the channel capacity at optical frequencies in a propagation distance of 4 m.