I'm going to try to do some air layering Citrus. Looks fairly easy, never tried this. Do you have to use Sphasgnum Peat Moss? I have tons of Potting Soil mixture of Sphasgnum Peet Moss and Perlite. Does it have to be Plain Sphasgnum Peet Moss for the air layering to work?

It seems like your mixture should work; I've tried various materials, like coir (coconut husk fibers) and partially-composted palm fronds, with success. The principal requirements are that it be able to retain moisture but also circulate a bit of air. Sphagnum/perlite fits the bill. If the mixture contains a lot of perlite, making it loose, then in might be harder to work with, but that's not really a reason not to try. You could also just pick out some of the perlite in that case. Good luck.

I saw a You Tube video where they air-layered using alum. foil rather than plastic.

The foil held its shape better so that you could really pour any type of medium into it. Then they moulded the foil up around the top to close it off. The foil also keeps the temperature down.

Not sure, but I might also poke a few holes in the foil at the lowest point to allow for drainage, just in case.

Foil would be more difficult to check for roots though.