You can research this online but the general direction you want to go is to express that traditional airline systems worked passengers from one point to another and passengers often had to switch airlines and things like that in the middle of their trip to get somewhere. A hub and spoke system is more efficient and allows for the same airline to manage each leg of a complex trip. Airlines can offer many flights each day between the hub and another city as sort of a shuttle service. Hubs can service more regional airports rather than focusing on big cities as in the past. Airlines can offer benefits to frequent travelers because travelers can be loyal to one airline that reaches everywhere they need to travel. Downside to hub-and-spoke system is concentration of risk in hubs. They are less diversified. For example, a hurricane that affects the Charlotte hub of US Airways will mess up a larger percentage of flights throughout the system than it would have under older point-to-point systems.
You have to come up with some suggestions. Then the interviewer will give you two options and a budget to exercise these options. You have to justify your selection based on the maximum benefit achieved from the two options.