"We would like to confirm that we are curtailing our wide-body overseas operations that are bleeding heavily," said spokesman Prakash Mirpuri in a statement.
The debt-laden carrier has returned a leased Airbus A330-200, a mid-sized long-haul airliner, but it did not say how many flights would be affected.
Kingfisher, which is already facing severe disruption due to strikes by pilots over unpaid wages, flies to eight overseas destinations, including London, Dubai and HongKong.
Later in the day, India's director general of civil aviation E.K. Bharat Bhushan said the situation was "causing distress to the travelling public and a matter of concern".
"(Kingfisher) had given us a recovery plan and they have not been able to stick to it. The situation cannot continue like this," he told reporters at the sidelines of an aviation conference in the southern Indian city of Hyderabad.
Bhushan however declined to comment on any regulatory action.
Kingfisher operated only 101 out of the 175 scheduled flights on Tuesday and expects to run the same number on Wednesday.
"The airline had reached a dead-end. Scaling back overseas operations was expected, also considering they have few pilots to fly planes," an aviation analyst with a Mumbai-based brokerage said, declining to be named.
The airline announced separately that former tennis star and sports commentator Vijay Amritraj had resigned from its board, citing an "increase in his travel schedule and commitments."
The resignation of Amritraj, who joined the board in 2007, was a further blow as bad news piles up on one of the former stars of India's once-booming sector.
The carrier has never turned a profit since its launch in 2005 and owes millions of dollars to suppliers, lenders and staff.
Its bank accounts have been frozen by Indian authorities due to the non-payment of taxes and it has been dropped by a vital global payments and booking system run by the International Air Transport Association (IATA).
The firm's chairman, liquor baron Vijay Mallya, will meet pilots' representatives on Thursday in New Delhi in a bid to resolve the strike and return the airline to its full schedule.
"Kingfisher apologises to all those who were affected," it said.
Kingfisher shares jumped three percent to 21.3 rupees on the Bombay Stock Exchange on Wednesday despite the problems, as investors welcomed the decision to cut back its international flights.
By the close it erased all gains, ending down 3.39 percent at 19.95.
A quarter of Kingfisher is owned by local banks and some have refused to lend the company more cash unless fresh capital is raised and a viable restructuring plan is presented.
India's airline industry -- once a symbol of the country's economic progress -- is now plagued by high fuel prices, fierce competition, price wars and inadequate airport infrastructure, with Kingfisher one of the worst-hit firms.
The government is considering a proposal to allow foreign airlines to buy up to 49 percent in local carriers.
Kingfisher on Wednesday confirmed "interest" from prospective buyers, but did not disclose their identities.
Analysts estimate Kingfisher needs up to $600 million to survive.
The airline's net loss widened sharply to 4.44 billion rupees ($88 million) in the three months to December from a loss of 2.54 billion rupees a year earlier, while its debt totals at least $1.3 billion.