Appearing before a bench headed by Justice T S Thakur, advocate Lalit Bhasin said the national carrier no longer wants to pursue the case and sought to withdraw the petition.
The airline had on May 10 filed the application alleging that the protest by the IPG, which disrupted international flights of the airline, amounts to the contempt of the apex court orders. The strike had been called off later.
The IPG was protesting the national carrier's move to send pilots from both Air India and erstwhile Indian Airlines in equal numbers to get trained for flying the Boeing 787 Dreamliners, the first of which is likely to be inducted later this month.
The bench, meanwhile, asked the Bombay High Court to adjudicate the dispute on training of pilots to fly Boeing 787 within three months.
The matter reached the Supreme Court after Air India had appealed against March 13 order of the Bombay High Court which had restrained the national carrier from sending any pilot from Indian Airlines for training to fly Boeing 787.
Later on April 23, the high court order was stayed by the apex court which had made it clear "that the training imparted to the members of the IPG shall remain subject to the final outcome of the writ petition and shall not prejudice the rights and contentions of the writ petitioners before the high court in any manner".