EasyJet expects to operate "less than 40%" of its planned capacity during its fourth quarter.
The decision comes after the UK’s latest quarantine announcements, which saw seven Greek islands lose their quarantine-free travel corridor status.
EasyJet cited constantly evolving government restrictions across Europe and quarantine measures in the UK for its decision.
It added customer confidence to make travel plans had been "negatively affected" by the government’s decision on Greece.
"In response to this reduced demand for travel, based on current travel restrictions and quarantines in the markets where we operate, easyJet now expects to fly slightly less than the 40% of planned capacity for Q4 2020, which was highlighted at our Q3 trading update," said the airline in a statement, adding thinning its schedule allowed it to focus on "profitable flying".
In a trading update on Tuesday (8 September), easyJet said it couldn’t offer any longer-term financial forecast at the present time, but pledged to continue to minimise cash burn and review liquidity on a regular basis, as well as assess "any further funding opportunities".
Chief executive Johan Lundgren said: "We are closely monitoring customer behaviour and amending flying to ensure our schedule is aligned with demand.
"Following the imposition of additional quarantine restrictions to seven Greek Islands and the continued uncertainty this brings for customers, demand is now likely to be further impacted and therefore lower than previously anticipated.
"We now expect to fly slightly less than 40% of our planned schedule over the current quarter. We will continue to take a prudent and conservative approach to capacity, as we have done during this period."
Lundgren continued: "We know our customers are as frustrated as we are with the unpredictable travel and quarantine restrictions. We called on the government to opt for a targeted, regionalised and more predictable and structured system of quarantine many weeks ago so customers could make travel plans with confidence.
"It is difficult to overstate the impact that the pandemic and associated government policies has had on the whole industry."
He added: "We again call on the government to provide sector specific support for aviation which needs to take the form of a broad package of measures including the removal of APD for at least 12 months, the alleviation of ATC [air traffic control] charges along with continuation of the slot rule waiver.
"These steps will support the retention of skills in the sector – all of which would support jobs and promote connectivity."