Icelandair Group is buying rival Wow Air in a major consolidation of the Icelandic aviation market.

The two airlines will continue to operate as separate brands and neither side has so far revealed a price or terms of the deal, which was announced Monday.

Together the pair will have around 3.8 percent of the transatlantic aviation market.

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The deal is still subject to Icelandair shareholder approval and due diligence. It must also get sign off from Icelandic competition regulators.

Consolidation within the Icelandic aviation sector comes during a difficult time for the wider tourism industry.

Travelers had flocked to the country in the wake of the 2008 financial crisis but the industry is cooling.

Icelandair and Wow Air have also had their own problems. Icelandair’s CEO Björgólfur Jóhannsson resigned in August after the carrier slashed its profit outlook and it is still looking for a permanent successor.

Wow Air, meanwhile, was reportedly on target to make a financial loss in its current financial year.

It had been working towards an initial public offering (IPO) and when Skift asked its founder and CEO Skúli Mogensen two months ago whether a merger was in the cards, he said he wasn’t sure.

“Wow Air has in recent years built a strong brand and enjoyed great success in the company‘s markets to and from Iceland and across the Atlantic. There are many opportunities for synergies with the two companies but they will continue to operate under their own brands and operating approvals,” said Bogi Nils Bogason, interim president and CEO of Icelandair Group.

“The tourism industry is one of the cornerstones of the Icelandic economy and it is important that flights to and from Iceland will remain frequent,” he added.

Mogensen said: “I am very proud of the success and development that we at Wow Air have enjoyed in the past few years and I am thankful for the response we have received since our very first flight. We have created a strong team that has reached remarkable success and has been a pioneer in low-cost flights across the North-Atlantic.

“A new chapter now starts where Wow air gets an opportunity to grow and prosper with a strong backer like Icelandair Group that will strengthen the foundations of the company,” he added, “and strengthen its international competitiveness even further.“