American Airlines is trimming the services associated with its lowest fares. It has introduced a new “Basic Economy” fare: passengers in these “no frills” seats will only be allowed to carry onboard a small personal item that can fit under their seat, and won’t be able to make seat assignments in advance, among other restrictions.

Basic Economy passengers also will be seated in the final group to board aircraft, won’t be eligible for upgrades, fly standby or make same-day changes to their flight itinerary, and will be whacked with an extra US$25 fee (in addition to regular checked-bag fees) if they have to check a bag at the gate. Tickets will be non-exchangeable and non-refundable.

Customers with Basic Economy tickets won’t be able to pay to carry on bags fitting in the overhead bin, but will be compelled to check all of their luggage. The airline says this is partly a way to reduce demand for limited bin space. Basic Economy seats won’t be segregated from other Main Cabin seating, however.

American Airlines President Robert Isom spun the introduction of Basic Economy class as a way for the airline to compete with ultra low-cost carriers, like pay-as-you-go Spirit Airlines. “American Airlines now has something to offer every customer, from those who want simple, low-price travel to those who want an ultra-premium experience via First Class,” said Isom.

Basic Economy fares will be rolled out in ten US markets beginning in February 2017, and expanded to other markets later this year, the airline announced.

Frequent-flyers will still earn miles for travelling in Basic Economy class, but will earn a reduced amount toward elite status with American. Elite customers and AAdvantage credit-card holders will continue to receive priority or preferred boarding, and will still be able to check bags free as per the terms of their cardholder agreement.

The airline stressed that Basic Economy isn’t a newly discounted fare type, but rather a reduced set of services pinned to its lowest available fare category.