The third runway was due to cost about £16.8 billion, but the west London hub claims it can complete the project for £14 billion without compromising on passenger experience or its commitments to local communities. Firstly planned new buildings would be repositioned over existing public transport and baggage infrastructure, (including additional capacity at T2 and T5), rather than a dedicated new terminal or satellite building as has been mapped out in previous plans.
Additionally, Heathrow added that terminal capacity could be added more slowly or "incrementally" through a phased construction process to "better match growing demand".
Crucially Heathrow said that they would result in expansion "with airport charges staying close to today's levels".
"The current regulatory system incentivises Heathrow to spend an exorbitant amount of money at passengers' expense and the regulator is unable, or unwilling, to force the airport to provide a detailed cost breakdown".
Willie Walsh, IAG chief executive, said: "It's unacceptable that a monopoly can charge these prices without having to explain why".
"Heathrow's project costs frequently increase substantially from their original budget without any justification".
"The government must protect consumers by putting a cap on what they pay to use Heathrow. How can that be right?"
"The Secretary of State [Chris Grayling] set us the challenge to deliver an expanded airport for Britain with passenger charges staying close to current levels", says the executive director of expansion at Heathrow, Emma Gilthorpe. We have now identified potential savings of £2.5bn and are increasingly confident we can meet the affordability challenge.
The proposals - which will be released in detail as part of Heathrow's public planning consultation in January - have been developed in cooperation with the airlines.
"We are looking forward to presenting detailed options on how to do it in our consultation in January, and while we will continue to work to reduce the cost of expansion, we will not compromise on our local commitments".