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Optical networks can support service degradation by providing bandwidth lower than that required to adapt the network provisioning when optical resources are insufficient. This paper proposes a service-degradation algorithm that is aware of application characteristics in Elastic Optical Networks (EONs). The algorithm considers a proportional Quality-of-Service (QoS) model and cross-layer information to decide which lightpath to be degraded, and it aims to reduce the impact of resource unavailability on delay and bandwidth sensitive applications. Results show that the proposed strategy can decrease blocking probability by up to 93% and reduce the number of applications penalized by service degradation by 100% compared to other approaches unaware of application characteristics.