Can the Peak Three Air stroller be repaired the folding release does not work?
I wish I could tell you, but as I do not know what exactly is wrong, how does it look, and what is happening, I can't really tell you if and how to repair it. I can, however, tell you that this is a relatively old model and is not supported by the manufacturer, so the repair options are limited to none, to be honest. Also, the folding being damaged is not an easy thing to do, usually requiring spare parts or quite a bit of skill - so, my general advice would be to rather get a newer, functioning pram instead of putting money into this one.
You can, also, check classifieds for the exact model and buy some, even an old one, just for the frame to be used with what you have - people sell these quite cheaply if, ie., the bassinet or the seat unit are damaged, faded, etc.
Other than that, try to google a stroller repair service around you, they might get a closer look at the problem, and perhaps tell you more...
Hope something will work out for you and your family!